LIBRARY 

OF  THE 

UNIVERSITY  OF  CALIFORNIA. 
Deceived         JAN  12    1893 

^Accessions  No.  $O~~irab    .  Class  No. 


THE    STUDY 


OF 


POLITICAL  ECONOMY. 


HINTS   TO  STUDENTS  AND    TEACHERS. 


BY 
J.  LAURENCE  LAUGHLIN,  PH.D., 

ASSISTANT    PROFESSOR    OF   POLITICAL    ECONOMY    IN     HARVARD    UNIVERSITY. 


NEW  YORK  •:•  CINCINNATI  •:•  CHICAGO 
AMERICAN    BOOK    COMPANY. 

FROM  THE   PRESS  OF 

D.  APPLETON  &  COMPANY. 


COPYRIGHT,  1885, 
Bv  D.  APPLETON  AND  COMPANY. 


FILIUS 
MATRI   BENIGN^E. 


OF  THE 

UNIVERSITY 


PREFACE. 


THE  existence  of  this  little  book  is  due  to 
an  attempt  to  convey,  by  lectures  to  students, 
an  understanding  of  the  position  which  political 
economy  holds  in  regard,  not  merely  to  its 
actual  usefulness  for  every  citizen,  but  to  its 
disciplinary  power,  and  to  the  qualities  of  mind 
which  are  necessary  for  success  in  the  study. 
It  was  hoped,  thereby,  that  young  men  might 
more  intelligently  decide  whether  they  should 
begin  the  study,  and,  even  when  they  had  pur- 
sued it  for  a  time,  whether  they  should  continue 
it.  Each  man  by  his  own  judgment,  after  an 
analysis  such  as  is  given  within  of  the  powers 
required  for  the  study  of  political  economy, 
should  be  enabled  to  come  to  a  decision  for 
himself  more  wisely  than  any  one  else  could 
reach  it  for  him.  I  desired  in  this  way  to  aid 


6  PREFACE. 

in  a  judicious  selection  of  courses  by  the  stu- 
dent who  had  some  freedom  of  choice  in  his 
college  course. 

The  interest  which  the  public  now  manifests 
in  economic  studies  led  me  to  put  the  material 
of  my  lectures  into  a  general  form,  in  order  that 
they  might  assist  inquirers  in  any  part  of  the 
country.  No  special  knowledge  has,  therefore, 
been  demanded  of  the  reader  by  way  of  prep- 
aration for  the  substance  of  what  I  have  intro- 
duced into  this  volume.  By  avoiding,  as  far  as 
possible,  all  technical  language,  I  have  sought 
to  make  the  inquiry  useful  to  any  general  read- 
er of  intelligence  who  may  be  interested  to 
know  how  to  study  political  economy.  But 
that  which  I  have  most  at  heart  is  the  exten- 
sion of  instruction  in  political  economy  in  all 
schools  and  colleges,  and  the  improvement  in 
methods  of  teaching  the  subject.  I  need  hardly 
say  that  I  shall  be  glad  if  these  pages  call  out 
any  suggestions  by  which  these  two  objects 
may  be  furthered. 

J.  LAURENCE  LAUGHLIN. 

HARVARD  UNIVERSITY, 
CAMBRIDGE,  MASS.,  May,  1885. 


CONTENTS. 


CHAPTER  I. 

PAGE 

OUR  CIVIL  WAR  THE  CAUSE  OF  A  NEW  INTEREST  IN  ECO- 
NOMICS     13 


CHAPTER  II. 
THE  CHARACTER  OF  POLITICAL  ECONOMY  AS  A  STUDY    .    51 

CHAPTER  III. 
THE  DISCIPLINARY  POWER  OF  POLITICAL  ECONOMY  .       .    73 

CHAPTER  IV. 

THE  RELATIONS  OF  POLITICAL  ECONOMY  TO  THE  LAW, 
THE  MINISTRY,  AND  JOURNALISM 90 

CHAPTER  V. 
METHODS  OF  TEACHING  POLITICAL  ECONOMY  .       .       .115 


A  TEACHER'S  LIBRARY, 

SELECTED  FROM 

ENGLISH,  FRENCH,  AND  GERMAN  AUTHORS. 


GENERAL  TREATISES. 

John  Stuart  Mill's  "Principles  of  Political  Economy." 
Abridged,  with  critical,  bibliographical,  and  explanatory  notes, 
and  a  sketch  of  the  History  of  Political  Economy,  by  J.  Lau- 
rence Laughlin.  A  text-book  for  colleges  (1884). 

Professor  Fawcett's  "  Manual  of  Political  Economy  "  (Lon- 
don, sixth  edition,  1883)  is  a  brief  statement  of  Mill's  book, 
with  additional  matter  on  the  precious  metals,  slavery,  trades- 
unions,  co-operation,  local  taxation,  etc. 

Antoine-Elise  Cherbuliez's  "Precis  de  la  science  e*cono- 
mique"  (Paris,  1862,  2  vols.)  follows  the  same  arrangement 
as  Mill,  and  is  considered  the  best  treatise  on  economic  science 
in  the  French  language.  He  is  methodical,  profound,  and 
clear,  and  separates  pure  from  applied  political  economy. 

Other  excellent  books  in  French  are :  Courcelle-Seneuil's 
"Traite  the"orique  et  pratique  d 'economic  politique  "  (1858), 
(Paris,  second  edition,  1867,  2  vols.),  and  a  compendium  by 
Henri  Baudrillart,  "  Manuel  d'e*conomie  politique  "  (third  edi- 
tion, 1872). 

Roscher's  "Principles  of  Political  Economy"  is  a  good 
example  of  the  German  historical  method :  its  notes  are 
crowded  with  facts ;  but  the  English  translation  (New  York, 
1878)  is  badly  done.  There  is  an  excellent  translation  of  it 
into  French  by  Wolowski. 

A  desirable  elementary  work,  "  The  Economics  of  Indus- 


io  A    TEACHER'S  LIBRARY. 

try"  (London,  1879;  second  edition,  1881),  was  prepared  by 
Mr.  and  Mrs.  Marshall. 

Professor  Jevons  wrote  a  "  Primer  of  Political  Economy  " 
(1878),  which  is  a  simple,  bird's-eye  view  of  the  subject  in  a 
very  narrow  compass. 

IMPORTANT  GENERAL  WORKS. 

Adam  Smith's  "  Wealth  of  Nations  "  (1776).  The  edition 
of  McCulloch  is  perhaps  more  serviceable  than  that  of  J.  E. 
T.  Rogers. 

Ricardo's  "Principles  of  Political  Economy  and  Taxa- 
tion" (1817). 

J.  S.  Mill's  "Principles  of  Political  Economy"  (2  vols., 
1848— sixth  edition,  1865). 

Schbnberg's  "  Handbuch  der  politischen  Oekonomie " 
(1882).  This  is  a  large  co-operative  treatise  by  twenty-one 
writers  from  the  historical  school. 

Cairnes's  "  Leading  Principles  of  Political  Economy " 
(1874);  "Logical  Method"  (1875),  lectures  first  delivered  in 
Dublin  in  1857. 

Carey's  "  Social  Science  "  (1877).  This  has  been  abridged 
in  one  volume  by  Kate  McKean. 

F.  A.  Walker's  "Political  Economy"  (1883).  This  au- 
thor differs  from  other  economists,  particularly  on  wages  and 
questions  of  distribution. 

TREATISES  ON  SPECIAL  SUBJECTS. 

W.  T.  Thornton's  "On  Labor"  (1869). 

H.  George's  "  Progress  and  Poverty  "  (1879).  ^n  connec- 
tion with  this,  read  F.  A.  Walker's  "  Land  and  Rent "  (1884). 

J.  Caird's  "  Landed  Interest"  (fourth  edition,  1880),  treat- 
ing of  English  land  and  the  food-supply. 

McLeod's  "  Theory  and  Practice  of  Banking "  (second 
edition,  1875-1876). 


A    TEACHER'S  LIBRARY.  „ 

Goschen's  "  Theory  of  Foreign  Exchanges  "  (eighth  edi- 
tion, 1875). 

W.  G.  Sumner's  "  History  of  American  Currency  "  (1874). 
John  Jay  Knox's  "  United  States  Notes  "  (1884). 
Jevons's  "  Money  and   the   Mechanism  of  Exchange " 

(1875). 

Tooke  and  Newmarch's  "History  of  Prices "  (1837-1856), 
in  six  volumes. 

M.  Block's  "  Trait^  the"orique  et  pratique  de  statistique  " 
(1878). 

Leroy-Beaulieu's  "  Traite  de  la  science  des  finances " 
(1883).  This  is  an  extended  work,  in  two  volumes,  on  taxa- 
tion and  finance ;  "  Essai  sur  la  repartition  des  richesses  " 
(second  edition,  1883). 

F.  A.  Walker's  "  The  Wages  Question  "  (1876) ;  "  Money  " 
(1878). 

L.  Reybaud's  "  Etudes  sur  les  reformateurs  contemporains, 
ou  socialistes  modernes"  (seventh  edition,  1864). 

Rae's  "  Contemporary  Socialism  "  (1884)  gives  a  compen- 
dious statement  of  the  tenets  of  modern  socialists.  See,  also, 
R.  T.  Ely's  "  French  and  German  Socialism  "  (1883). 

DICTIONARIES. 

McCulloch's  "  Commercial  Dictionary  "  (new  and  enlarged 
edition,  1882). 

Lalor's  " Cyclopaedia  of  Political  Science"  (1881-1884)  is 
devoted  to  articles  on  political  science,  political  economy,  and 
American  history. 

Coquelin  and  Guillaumin's  "  Dictionnaire  de  1'economie 
politique"  (1851-1853,  third  edition,  1864),  in  two  large 
volumes. 

REPORTS  AND  STATISTICS. 

The  "Compendiums  of  the  Census"  for  1840,  1850,  1860, 
and  1870,  are  desirable.  The  volumes  of  the  tenth  census 


.- 


12  A    TEACHER'S  LIBRARY. 

(1880)  are  of  great  value  for  all  questions;  as  is  also  F.  A. 
Walker's  "Statistical  Atlas"  (1874);  and  Scribner's  "Statis- 
tical Atlas  of  the  United  States,"  based  on  the  census  of  1880. 

The  United  States  Bureau  of  Statistics  issues  quarterly 
statements ;  and  annually  a  report  on  "  Commerce  and  Navi- 
gation," and  another  on  the  "Internal  Commerce  of  the 
United  States." 

The  "  Statistical  Abstract "  is  an  annual  publication,  by  the 
same  department,  compact  and  useful.  It  dates  only  from  1 878- 

The  Director  of  the  Mint  issues  an  annual  report  dealing 
with  the  precious  metals  and  the  circulation.  Its  tables  are 
important. 

The  Comptroller  of  the  Currency  (especially  during  the 
administration  of  J.  J.  Knox)  has  given  important  annual  re- 
ports upon  the  banking  systems  of  the  United  States. 

The  reports  of  the  Secretary  of  the  Treasury  deal  with 
the  general  finances  of  the  United  States.  These,  with  the 
two  last  mentioned,  are  bound  together  in  the  volume  of 
"  Finance  Reports,"  but  often  shorn  of  their  tables. 

There  are  valuable  special  reports  to  Congress  of  com- 
missioners on  the  tariff,  shipping,  and  other  subjects,  pub- 
lished by  the  Government. 

The  report  on  the  "  International  Monetary  Conference  of 
1878  "  contains  a  vast  quantity  of  material  on  monetary  ques- 
tions. 

The  British  parliamentary  documents  contain  several  an- 
nual "  Statistical  Abstracts  "  of  the  greatest  value,  of  which  the 
one  relating  to  other  European  states  is  peculiarly  convenient 
and  useful.  These  can  always  be  purchased  at  given  prices. 

A.  R.  Spofford's  "  American  Almanac  "  is  an  annual  of 
great  usefulness. 

J.  H.  Hickcox,  Washington,  publishes  a  very  useful 
monthly  catalogue  of  the  Government  publications,  entitled 
"  United  States  Publications." 


CHAPTER  I. 

OUR  CIVIL  WAR  THE  CAUSE  OF    A  NEW  INTER- 
EST IN  ECONOMICS. 

IN  some  parts  of  our  country  there  is  a  cur- 
rent maxim  among  the  old-fashioned  gardeners, 
to  the  effect  that  "  a  wind-shaken  tree  will  bear 
the  more  fruit."  By  widening  its  application, 
we  shall  find  in  it  no  little  subtle  force.  In  fact, 
it  is  a  homely  expression  of  an  idea  which  un- 
doubtedly finds  its  parallel  in  individual  and  so- 
cial life.  As  individuals,  we  all  know  that  there 
is  no  real  growth  of  character  except  by  a  con- 
quest over  opposing  difficulties ;  to  do  right 
when  it  is  against  our  inclinations  and  preju- 
dices strengthens  the  moral  fiber,  so  that  the 
firm  organism  gives  forth  fairer  and  sweeter 
fruit.  But  carry  the  analogy  one  step  farther 
— from  the  individual  to  society.  In  the  social 
organism  it  is  possible  that  we  may  find,  as  it 
were,  a  moral  law  of  conservation  of  energy,  by 


I4       THE  STUDY  OF  POLITICAL  ECONOMY. 

which  there  appears  a  relation  between  a  loss 
and  a  gain  ;  so  that  a  sacrifice  becomes  the  par- 
ent of  a  subsequent  good.  Some  great  convul- 
sions in  political  life  find  their  justification  when 
viewed  in  the  light  of  this  truth,  and  by  it  his- 
tory often  reveals  to  us  some  different  lessons 
than  those  which  lie  on  the  surface  of  events ; 
but  it  is  the  most  natural  thing  that  this  inter- 
pretation should  escape  the  minds  of  the  partici- 
pants in  the  sacrifice,  because  the  future  gain 
may  lie  at  such  a  distance  and  be  so  impalpable 
as  even  to  elude  considerable  foresight.  We 
are,  however,  already  reaching  that  interesting 
distance  from  the  events  of  the  civil  war  where 
we  can  begin  to  study  them  historically,  and  to 
consider  some  of  their  evident  effects.  A  few 
years  ago,  we  saw  armies  go  out  of  our  sight 
during  the  civil  war,  only  to  come  back  thinned, 
injured  by  disease,  with  half  their  number  left 
dead  on  the  field.  Death  meant  bitter,  inde- 
scribable sorrow  in  all  our  homes.  The  experi- 
ences of  the  war  were  felt  to  be  pitiless,  inex- 
plicable, and  hard.  And  yet,  perhaps,  a  subtle 
suggestion  may  have  passed  into  some  of  our 
minds  that  it  was  not  simply  by  dying,  or  in 


THE  STUDY  OF  POLITICAL  ECONOMY.       ^ 

living,  that  the  best  law  of  our  being  was  en- 
forced ;  that  there  was,  in  truth,  some  Power  be- 
hind it  all ;  that  some  purpose  was  being  worked 
out  through  each  one  of  us ;  and  that,  although 
not  comprehended  by  us  all,  each  one  was  as 
necessary  to  the  whole  in  the  same  way,  for 
example,  that  each  leaf  is  necessary  to  the  com- 
pleted organism  of  the  whole  tree,  and  ceases  to 
be  when  it  is  separated  from  the  stem.  But  yet 
it  may  be  possible,  without  presuming  too  much, 
to  begin  to  look  for  some  of  the  results  of  that 
social  and  political  upheaval  which  we  must 
now  admit  has  been  the  greatest  and  most  con- 
siderable disturbance  in  our  national  life  since 
the  foundation  of  the  government.  It  is  worth 
while  to  examine  whether  the  wind-shaken  tree 
has  borne  the  more  fruit. 

The  process  by  which  citizens  from  secluded 
districts  and  remote  towns  were  sent  through 
new  cities  to  opposite  parts  of  the  Union,  ex- 
changing ideas  with  men  of  different  habits  of 
thought,  was  a  marked  feature  of  the  war  period, 
and  leavened  the  mental  life  of  the  American 
people  in  a  way  hitherto  little  suspected.  It 
was  something  like  sending  a  country  boy  to 


!6       THE   STUDY  OF  POLITICAL  ECONOMY. 

college,  where  he  changes  the  ideas  of  the  farm 
for  what  is  best  in  literature  and  science  ;  but,  in 
the  case  of  the  war,  it  was  a  college  of  national 
politics  and  struggles,  and,  instead  of  one  boy, 
there  were  a  million  men.  The  rural  popula- 
tion came  into  a  knowledge  of  our  cities,  while 
the  urban  classes  were  carried  away  into  new 
climates,  and  into  unvisited  parts  of  our  vast 
domain.  New  sights,  new  methods  of  cultiva- 
tion, different  standards  of  living,  stimulated  the 
dull  and  fired  the  active  and  enterprising  men 
in  the  ranks.  The  life  of  the  farm  and  the  vil- 
lage was  widened  to  an  interest  in  the  nation. 
About  the  same  time,  moreover,  the  vast  in- 
crease in  easy  means  of  communication  by  rail- 
ways, and  a  great  extension  of  the  use  of  the  news- 
paper and  telegraph,  which  were  stimulated  by 
the  war  exigencies,  brought  provincial  towns  into 
direct  connection  with  the  outside  world.  In 
the  process  of  comparison  with  the  more  attract- 
ive habits  of  the  dwellers  in  the  great  cities  and 
towns,  even  oddities  of  customs  and  dress  began 
to  disappear.  In  various  ways  like  this,  the 
thinking  horizon  was  extended.  The  presence 
of  complicated  problems  dawned  upon  the  con- 


THE   STUDY  OF  POLITICAL  ECONOMY.       iy 

sciousness  of  dull  intellects,  and  brighter  minds 
found  new  spurs  to  ambition  in  the  questions  of 
larger  interest.  On  all  sides  men  felt  them- 
selves coming  into  contact  daily  with  new  diffi- 
culties, under  a  dim  comprehension  of  their  big- 
ness, but  with  a  strong  belief  that  their  knowl- 
edge of  how  to  deal  with  them  was  inadequate. 
In  short,  the  tremendous  crisis  through  which 
we  passed  during  our  civil  war,  apart  from  its 
effect  on  the  preservation  of  the  Union,  has  had 
a  wide,  although  subtle,  influence  on  the  moral 
and  intellectual  character  of  the  American 
people. 

It  can  easily  be  imagined  that  the  work- 
ing of  these  new  forces  should  have  had  a  se- 
rious effect  on  a  quick  and  susceptible  race. 
Under  somewhat  similar  conditions,  they  have, 
in  fact,  had  a  distinct  influence  on  a  more  phleg- 
matic people  than  our  own.  Old  students  at 
Gottingen,  on  returning  to  the  university  since 
the  late  wars  in  which  Germany  has  been  en- 
gaged,, are  amazed  to  find  the  old-fashioned  spot 
— where  the  customs,  habits,  and  naive  simplici- 
ty of  one  hundred  years  ago  had  prevailed  until 
quite  recently — now  wholly  changed.  The  com- 


!g       THE   STUDY  OF  POLITICAL  ECONOMY. 

mercial  spirit  has  seized  the  formerly  simple- 
minded  peasants,  and  the  quiet  town  now  hears 
in  its  streets  the  heavy  march  of  cosmopolitan- 
ism. 

The  United  States,  as  well  as  Germany,  had 
new  problems  to  solve.  The  conflict  of  arms 
ended  the  long  slavery  struggle,  it  is  true,  but 
the  war  brought  with  it  intricate  questions  of  a 
character  very  different  from  those  which  had 
gone  before.  Without  warning,  and  conse- 
quently without  the  opportunity  to  make  due 
preparation  or  acquire  proper  training,  our  pub- 
lic men  were  confronted,  as  the  war  progressed, 
with  matters  of  vital  importance  not  only  in  inter- 
national and  constitutional  law,  but  in  taxation, 
and  in  every  form  of  administration  and  finance. 
The  demand  for  men  who  had  devoted  themselves 
earnestly  to  the  study  of  governmental  science 
was  an  imperative  one ;  but,  generally  speaking, 
it  was  met  in  a  way  which  showed  that  there 
existed  in  the  community  a  class  from  whom 
these  necessary  men  could  be  recruited.  That 
class  was  the  legal  profession  of  the  country. 
The  questions  of  reconstruction,  the  relation  of 
the  Federal  Government  to  the  States,  the  civil 


THE   STUDY  OF  POLITICAL  ECONOMY.       I9 

rights  of  the  negro,  our  attitude  toward  foreign 
powers  during  the  blockade  of  the  Southern 
ports,  were  not  abandoned  to  men  who  had 
never  habituated  themselves  to  discussions  such 
as  were  involved  in  their  settlement.  There 
were  differences  of  opinion,  of  course  ;  but,  in- 
asmuch as  these  differences  of  opinion  were  the 
outcome  of  different  political  theories,  this  itself 
proved  that  attention  had  been  previously  given 
to  such  subjects  to  the  extent  that  crystallized 
systems  of  thought,  formulated  in  dogmas,  had 
been  created  by  the  various  parties.  It  may 
then  be  truly  said  that,  in  respect  of  political 
questions,  we  were  not  wholly  unprepared  for 
the  emergencies  of  the  war. 

But,  as  has  been  suggested,  other  considera- 
tions than  those  of  a  legal  and  constitutional 
character  arose,  and  new  burdens  were  laid 
upon  the  public  men  of  that  day.  The  mag- 
nitude of  the  military  operations  involved  an 
expenditure  of  money  by  the  State  on  so  large 
a  scale  as  to  demand  from  our  statesmen  a 
financial  skill  of  an  almost  unparalleled  kind. 
To  meet  these  newly-presented  questions  of  tax- 
ation finance,  and  currency,  upon  what  body  of 


20       THE  STUDY  OF  POLITICAL  ECONOMY. 

men  could  we  call?  To  this,  answer  must  be 
frankly  made  that  the  war  overtook  us  without 
a  supply  of,  or  even  a  few,  trained  economists 
and  financiers  in  public  life.  The  economic  part 
in  the  equipment  of  a  public  official  had  been 
hitherto  almost  wholly  neglected.  In  fact,  po- 
litical economy  and  finance  had  never  been  seri- 
ously studied  in  the  schools ;  but,  if  studied  at 
all,  they  had  been  classed  in  the  old-fashioned 
required  curriculum  with  Butler's  "  Analogy " 
and  the  "  Evidences  of  Christianity."  They  had 
been,  moreover,  compressed  into  the  briefest 
possible  time,  which  would  naturally  assure,  if 
not  a  dislike  of  the  study,  at  least  a  superficiality 
even  worse  than  total  ignorance.  Although 
Adam  Smith  wrote  his  "  Wealth  of  Nations  "  in 
1776,  it  is  a  mortifying  fact  that  political  econo- 
my was  practically  an  unknown  science  to  the 
American  people  before  1860. 

When  this  fact  is  considered,  and  when  we 
realize  how  unfit  we  were  to  handle  economic 
problems  skillfully,  it  is  an  interesting  study  to 
look  into  the  way  in  which  our  people  took 
up  the  burdens  and  tasks  of  our  great  civil  con- 
flict. There  was  the  quick  adaptability  of 


THE  STUDY  OF  POLITICAL  ECONOMY.       2i 

Americans  to  start  with ;  there  was  plenty  of 
patriotism  and  good-will,  and  no  lack  of  those 
high  qualities  of  self-sacrifice  and  heroism  which 
are  still  fragrant  to  us;  but  lawyers,  such  as 
Chase  and  Fessenden,  were  practically  our  only 
financiers.  Operations  which  required  patience, 
experience,  knowledge,  and  leadership  had  to 
be  carried  on  by  men  who  had  no  such  quali- 
ties. Early  in  the  war  they  were  required  to 
consider  a  scheme  of  raising  loans,  and  to  adjust 
a  plan  of  taxation  corresponding  to  the  extraor- 
dinary war  expenses ;  but  the  banks  became 
loaded  with  unsalable  United  States  bonds, 
and,  unguided,  the  country  drifted  at  once  into 
a  position  where  specie  payments  were  sus- 
pended at  the  end  of  1861.  Without  consider- 
ing alternatives,  they  created  a  national  debt  in 
a  few  years  as  great  as  that  incurred  by  old  des- 
potisms of  Europe  in  centuries ;  without  fore- 
sight, or  financial  leadership,  they  fell  into  a 
ruinous  issue  of  irredeemable  paper  money, 
which  even  yet,  although  somewhat  contracted, 
still  remains  a  source  of  anxiety  and  danger; 
without  intending  it  as  the  aim  of  a  definite 
policy,  but  simply  through  a  desire  to  gain  a 


22       THE  STUDY  OF  POLITICAL  ECONOMY. 

war  revenue,  they  imposed  heavy  customs  duties 
on  imports,  which  have  brought  into  existence 
business  interests  largely  dependent  on  the  con- 
tinuance of  these  temporary  war  -  measures. 
When  it  is  realized  that  principles  of  taxation 
are  probably  less  understood  to-day,  even  by 
intelligent  men,  than  any  other  branch  of  eco- 
nomics, it  is  not  surprising  to  find  that  in  1864 
Congress  was  occupied  only  five  days  in  pass- 
ing through  both  its  branches  the  most  gigantic 
taxation  measure  of  the  war.  The  National 
Bank  Act,  moreover,  which  has  fortunately 
given  us  the  best  system  of  banking  ever  en- 
joyed by  the  country,  was  in  reality  recom- 
mended to  Congress  with  the  hope  that  it  would 
facilitate  the  sale  of  United  States  bonds  and  aid 
our  tottering  credit.  We  blundered  egregious- 
ly;  but  our  vast  resources  made  it  possible  to 
blunder  without  much  suffering.  Then,  since 
all  our  national  questions  come  before  the  vot- 
ers, the  country  was  obliged  to  listen  to  discus- 
sions in  Congress,  in  the  newspapers,  and  on  the 
"  stump,"  to  very  difficult  problems  of  foreign 
trade,  currency,  and  finance.  Out  of  our  very 
blunders,  and  from  this  revelation  to  the  people 


THE  STUDY  OF  POLITICAL  ECONOMY.       2$ 

of  its  ignorance,  its  inability  to  know  how  to 
meet  the  demands  of  a  great  emergency  period, 
rose  a  desire,  slowly  growing  throughout  the 
community,  as  the  recognition  of  the  want  was 
felt,  to  learn  something  of  economics,  and  to 
study  the  principles  which  underlie  the  material 
prosperity  of  the  nation.  Out  of  the  conscious- 
ness of  weakness  developed  in  the  struggle  came 
a  natural  longing  for  strength.  The  political 
leader  who  spoke,  the  journalist  who  discussed, 
the  citizen  who  listened  and  read,  all  began  to 
lament  their  want  of  training,  and  to  admit  the 
need  of  wholesome  and  sound  instruction.  The 
wish  to  speak  intelligently  on  every  subject 
which  is  uppermost  in  men's  minds  is  a  work- 
ing factor  in  the  nature  of  all  Americans ;  and 
the  constant  reference  to  economic  questions  in 
the  journal  which  lay  on  the  breakfast-table  was 
at  once  a  constant  reminder  to  the  reader  of  his 
ignorance  and  a  laudable  stimulus  toward  bet- 
ter knowledge  of  such  subjects.  The  parent 
became  anxious  that  the  son  should  have  the 
training  which  he  had  never  got ;  and  the  new 
generation  is  now  responding  to  this  feeling. 
In  fact,  it  is  now  unquestionable  that  a  new 


24       THE  STUDY  OF  POLITICAL  ECONOMY. 

interest  in  economics  and  finance  has  already 
arisen,  and  the  cause  of  it  seems  to  be  very  clear. 
The  Civil  War  was,  so  to  speak,  the  convulsion 
which  brought  into  existence  a  desire  for  the 
study  of  political  economy  in  the  United  States. 
The  country  was  stirred  to  its  depths  by  eco- 
nomic questions ;  for  they  entered  into  the  po- 
litical issues  of  exciting  campaigns.  The  war 
issues  thus  did  for  the  United  States — in  a  dif- 
ferent way,  of  course — even  more  than  the  corn- 
law  agitation  did  for  England.  They  actually 
gave  birth  to  new  motives  for  study.  There 
never  has  been  a  time  in  our  history  when  there 
was  so  evident  a  desire  to  get  light  on  the  eco- 
nomic problems  of  the  day  as  now.  There  is  a 
new  stir  among  the  ranks  of  the  young  men  at 
college  ;  and  the  printing-press  sends  forth  an 
increasing  flood  of  new  books  upon  subjects 
which  are  constantly  discussed  in  the  daily 
newspapers.  There  is,  without  doubt,  a  new- 
born but  slowly  growing  attention  by  the 
younger  men  of  our  land  to  the  necessity — as 
well  as  the  duty — of  fitting  themselves  properly 
for  the  responsibilities  of  citizenship.  In  every 
social  class,  and  in  every  department  of  busi- 


THE   STUDY  OF  POLITICAL  ECONOMY.       25 

ness,  men  are  eagerly  asking  for  information  on 
economic  topics.  If  the  war  has  given  us  this 
— the  absence  of  which  used  to  be  so  often  la- 
mented by  thoughtful  men  a  few  years  ago — 
then  may  some  of  our  sacrifices  not  have  been 
in  vain.  In  that  case  the  wind-shaking  has 
surely  resulted  in  abundant  fruit. 

To  the  minds  of  some  persons  the  tangible 
evidences  of  this  movement  may  not  have 
been  shown  ;  but  it  will  not  be  difficult  to 
give  visible  proof  to  such  people.  In  the  pres- 
ent awakening  in  educational  discussion,  one 
phase  of  which  has  been  called  the  "  Greek 
Question,"  it  is  worth  while  to  notice  the  influ- 
ence of  the  war  period  on  the  college  curricu- 
lum. In  most  of  our  schools  and  colleges,  on 
the  breaking  out  of  the  war — and  even  to  the 
present  day — the  pecuniary  resources  and  en- 
dowments had  been  tied  down  by  the  provis- 
ions of  donors,  under  the  binding  force  of  old 
traditions,  to  supply  instruction  in  the  custom- 
ary Greek,  Latin,  mathematics,  and  philosophy, 
which  were  then  considered  the  only  essentials 
of  a  liberal  education.  But  when,  after  tasting 
of  the  forbidden  fruit  of  civil  strife,  our  naked 
3 


26       THE  STUDY  OF  POLITICAL  ECONOMY. 

ignorance  was  revealed  to  us,  and  when  we 
looked  about  to  see  wherewithal  our  ignorance 
should  be  clothed,  and  in  what  schools  the  new 
studies  could  best  be  followed,  it  was  discov- 
ered that  the  college  curriculum  (with  a  few  ex< 
ceptions)  made  practically  no  provision  for  such 
instruction.  In  the  old  days,  when  only  sailing- 
vessels  entered  Boston  harbor,  but  one  chan- 
nel ,  was  practicable,  and  all  the  fortifications 
were  placed  in  such  a  way  as  to  command  this 
single  means  of  approach  ;  yet,  when  steam  took 
the  place  of  sails,  another  channel  proved  the 
best,  but  it  is  now  wholly  undefended.  The 
old  ship-channel  must  be  defended,  but  so  must 
the  new  one.  Likewise,  in  the  case  of  collegiate 
studies,  the  old  subjects  are  desirable,  of  course, 
but  they  are  riot  the  only  desirable  ones.  The 
new  demands,  due  to  the  progress  of  the  age, 
must  also  be  met.  We  shall,  therefore,  look 
with  interest  to  see  if  the  college  curriculum 
shows  any  evidence  of  changes  made  to  satisfy 
the  new  wants.  As  we  look  into  the  work  of 
various  institutions,  these  changes  will  be  found 
to  be  very  considerable.  In  fact,  the  response 
of  the  schools  to  the  new  demands  is  at  once 


THE  STUDY  OF  POLITICAL  ECONOMY.      2; 

the  evidence  and  the  result  of  the  quickening 
and  stimulating  conditions  already  described. 
A  comparison  of  the  amount  of  instruction  in 
political  economy  given  by  the  principal  insti- 
tutions of  the  land  in  1860  and  1870  with  that 
given  in  1884  will  furnish  us  new  proof  that  the 
wind-shaken  tree  is  yielding  good  fruit.  (See 
pages  28  and  29.) 

When  it  is  considered  that  the  resources  of 
institutions  have  been  generally  hampered  by 
restrictions  as  to  their  use,  this  change  in  the 
course  of  studies  could  have  taken  place  only 
by  virtue  of  a  very  urgent  pressure  arising  from 
the  public  for  such  instruction.  Nor  can  any- 
thing show  more  distinctly  than  the  foregoing 
tables  how  young  is  any  real  systematic  study  of 
political  economy  in  this  country.  It  was  not 
likely  that  there  could  be  any  number  of 
trained  economists  among  us  in  the  days  when 
no  serious  attention  was  given  to  economic 
study  at  the  chief  seats  of  learning.  If  it  is 
thought  strange  that  we  have  had  no  "  Ameri- 
can school "  of  economists  (except  the  followers 
of  Carey),  there  is  a  good  reason  for  it  in  the 
absence  of  any  attempt  to  stimulate  the  best  of 


2g       THE  STUDY  OF  POLITICAL  ECONOMY. 


f 


I 


iri 


•8  Si 


5.2 
I* 


THE   STUDY  OF  POLITICAL  ECONOMY. 


ii  " 

H'jf 

&  1 

A  2 
Is'? 
§£H 

half  of  a  yea 
hours  a  wee 

0)  O 

<]J  *$ 

^02* 

•is 

PI 

151 


2  '3 


w 


ed  LH 

.eo 

<u  '2 


Ift 


3o       THE  STUDY  OF  POLITICAL  ECONOMY. 

our  youth  to  devote  themselves  to  this  branch 
of  learning.  But  no  excuse  for  a  lack  of  train- 
ing can  now  be  made,  and  there  is  hope  that 
the  present  generation  will  give  evidence  of 
having  made  good  use  of  its  better  opportuni- 
ties. 

But  apart  from  questions  of  training,  there 
is  a  peculiar  interest  in  the  present  position 
of  political  economy.  It  is  one  of  the  high- 
est attractions  of  a  branch  of  study  that 
the  student  can  enter  it  as  one  of  a  body  of 
scholars  who  are  still  acting  as  discoverers  and 
investigators.  All  of  the  results  of  political 
economy  are  not  yet  finally  settled  ;  and  al- 
though its  outlines  are  fairly  laid,  within  which 
any  progress  must  be  carried  out,  it  offers  the 
peculiar  charm  to  an  ambitious  mind  that  some- 
thing may  yet  be  done  toward  shaping  its  edifice 
into  fairer  proportions.  Particularly  does  the 
new  field  in  this  wide  country,  of  varying  re- 
sources, offer  tempting  opportunities  for  special 
studies  on  our  own  economic  conditions,  and  in 
the  application  of  principles  to  the  mass  of  in- 
dustrial facts  around  us. 

The  whole  trend  of  civilization,  moreover,  is 


THE   STUDY  OF  POLITICAL  ECONOMY.      3I 

in  the  direction  where  such  studies  will  be  more 
and  more  useful.  In  past  centuries  govern- 
ments, in  an  unsettled  state  of  society,  found 
their  chief  concern  lie  in  an  attention  to  ques- 
tions affecting  life  and  property.  Now  that 
Christianity  and  the  progress  of  enlightened 
ideas  of  government  have  made  life  and  liberty 
more  secure,  in  these  later  years  legislation  has 
concerned  itself  rather  with  property  than  life. 
A  few  centuries  have  made  a  great  change  in 
this  respect.  In  the  Middle  Ages,  while  robber 
barons  gained  an  income  by  an  investment  in 
castles,  retainers,  and  arms,  trade  was  regarded 
as  plebeian :  to  fight,  or  to  oppress,  was  consid- 
ered as  more  noble  than  to  encourage  produc- 
tion, or  work  for  the  improvement  of  the  poor. 
In  the  changed  industrial  conditions  of  to-day, 
castles  have  become  factories ;  retainers,  produc- 
tive laborers ;  and  arms,  the  hammers  and  tools 
of  the  artisan  ;  while  the  affairs  of  peaceful  trade 
and  the  increase  of  wealth  are  the  chief  causes 
of  solicitude  in  the  modern  State.  In  the 
Southern  States,  for  example,  we  have  disposed 
forever  of  a  question  of  human  liberty  in  regard 
to  the  slaves — a  bit  of  medisevalism — and  in  that 


3 2       THE   STUDY  OF  POLITICAL  ECONOMY. 

part  of  our  land  we  have  turned  our  faces  to- 
ward economic  problems.  How  can  the  South 
best  use  its  rich  land,  its  timber,  and  its  fine 
mineral  resources  ?  These  are  the  new  ques- 
tions. By  the  alembic  of  war,  and  by  the  inev- 
itable increase  of  population  and  wealth,  our 
public  measures  have,  in  truth,  become  almost 
entirely  economic. 

To  one  who  has  not  reflected  on  this  matter, 
it  is  almost  surprising  to  be  told  that  national 
measures  are  now  of  a  kind  that  require  for 
their  intelligent  treatment  some  other  training 
than  that  of  a  lawyer,  to  say  nothing  of  the  ir- 
relevancy of  service  in  the  army.  But  mere 
lawyers  and  soldiers  will  no  longer  do  for  legis- 
lators. Consider  the  character  of  the  questions 
at  this  time  pressing  upon  Congress  for  consid- 
eration, and  which  are  fraught  with  serious  re- 
sults to  the  business  interests  of  the  whole  coun- 
try. If  we  omit  the  administrative  and  politi- 
cal legislation  on  the  Civil  Service,  the  succes- 
sion to  the  Presidency,  and  a  National  Bank- 
ruptcy Law,  the  remaining  questions  before 
Congress  to-day  are  almost  entirely  economic. 

i.  There  is,  in  the  first  place,  the  false  sil- 


THE  STUDY  OF  POLITICAL  ECONOMY.      33 

ver  dollar,  masquerading  in  sheep's  clothing, 
waiting  to  catch  the  unwary  business  world 
napping,  when  it  will  gradually  assume  its  true 
depreciated  character  and  devour  from  15  to  18 
per  cent  of  all  creditors'  dues  as  estimated  at 
present  prices.  The  common  laborers,  more- 
over, receiving  at  first  the  same  money  wages 
as  now,  will  find,  when  prices  have  risen  to  the 
depreciated  silver  standard,  that  they  must  bring 
about  a  new  adjustment,  entailing  strikes,  mis- 
understandings, and  loss,  until  their  wages  shall 
rise  to  a  sum  sufficient  to  buy  again  as  much  as 
they  do  now.  Laborers  can  not  believe  that 
their  wages  are  so  high  as  to  be  willing  to  suffer 
this  losing  game  to  go  on.  What  has  Congress 
done  with  this  urgent  question?  Just  what  it 
did  in  the  last  months  of  1861,  and  the  early 
part  of  1862,  when  it  left  the  country  to  drift, 
unaided  and  undirected,  upon  the  shoals  of  de- 
preciated paper  money.  Monometallists  and 
bimetallists,  business  men  and  bankers,  have 
been  all  alike  assaulting  the  dangerous  silver 
legislation,  but  yet  Congress  has  remained  a 
very  Gibraltar,  in  which  the  silver  owners, 
supported  by  those  who  favor  a  cheap  unit 


34       THE  STUDY  OF  POLITICAL  ECONOMY. 

with  which  to  pay  their  debts,  are  securely  in- 
trenched. 

2.  Next,  there  is  the  banking  question.  The 
United  States  is  a  great  commercial  country,  and 
its  business  interests  will  grow  with  its  popula- 
tion and  wealth ;  and  these  interests  are  inex- 
tricably wound  up  with  banking  and  the  ability 
to  obtain  loans.  Nothing  can  be  more  delicate 
and  sensitive  than  the  machinery  of  banking 
and  credit  in  any  community ;  and  yet  men,  to 
satisfy  the  prejudices  of  their  constituents,  han- 
dle this  mechanism  with  about  the  same  air  of 
cheerful  indifference  as  that  which  character- 
izes a  child  when  dragging  around  a  rag  doll  by 
the  heels.  Persons  of  limited  horizon  live  too 
entirely  in  the  present ;  they  do  not  see  that  the 
present  has  grown  out  of  the  past.  In  the  old 
days  of  vicious  and  changing  systems  of  bank- 
ing, different  in  different  States,  no  one  knew 
what  bank-note  was  good,  and  our  faith  was 
pinned  on  the  statements  in  a  "  Bank-Note  De- 
tector," issued  frequently  enough  to  meet  the 
changing  values  of  the  State-Bank  issues.  We 
know  little  to-day  of  the  losses  suffered  by  note- 
holders in  those  former  times ;  for  the  present 


THE   STUDY  OF  POLITICAL  ECONOMY.       35 

National  Bank  system  absolutely  secures  the 
note-holder  against  any  loss,  and  because  a  note 
issued  in  Vermont  is  equally  good  in  Oregon 
or  Texas,  these  notes  give  a  stability  to  trade  in 
every  part  of  the  Union.  And  yet  the  whole 
problem  of  banking  in  the  United  States  is  un- 
solved. It  is  at  present  based  upon  a  deposit  of 
United  States  bonds,  which  are  fast  being  paid 
off  by  our  surplus  revenues.  What  basis  shall 
we  adopt  as  a  security  for  notes  when  the  na- 
tional debt  is  quite  extinguished  ?  This  is  a 
matter  which  vitally  concerns  every  citizen 
who  has  any  business  stake  in  our  land. 

3.  Again,  Congress  has  been  struggling 
with  the  most  difficult  of  all  problems — national 
taxation  ;  the  most  difficult,  because,  even  if  the 
best  policy  were  perfectly  seen,  there  is  an  end- 
less conflict  of  interests,  placing  us  in  great 
danger  of  passing  under  a  rule  of  the  strongest 
interests,  not  under  the  rule  of  impartial  justice. 
We  must  resolutely  face  the  fact  that  a  re- 
examination  of  our  whole  scheme  of  taxation 
can  not  be  any  longer  deferred.  The  heavy 
taxation  burdens  imposed  during  a  time  of  war 
and  peril,  to  the  fullest  extent  that  the  country 


36       THE  STUDY  OF  POLITICAL  ECONOMY. 

could  stand,  were  demanded  by  the  presence  of 
large  armies  in  the  field  which  were  destroying 
wealth  without  creating  it.  The  whole  situa- 
tion has  changed.  There  have  been  twenty 
years  of  peace.  The  national  debt  has  been 
reduced  one  half ;  and,  instead  of  being  obliged 
in  1867  to  raise  taxes  to  pay  annually  $143,000,000 
of  interest  on  the  public  debt,  we  are  obliged 
in  1883  to  collect  only  $59,000,000.  The  change 
to  a  peace  footing  means  a  readjustment  of  all 
branches  of  taxation ;  one  can  not  be  diminished 
by  itself,  any  more  than  we  should  consent  to 
remove  the  winter  clothing  from  the  right 
side  of  the  body  when  summer  comes  and 
leave  the  left  side  still  in  winter  array.  The 
question,  therefore,  involves  a  decision  upon  the 
retention  of  internal  taxes  on  distilled  spirits  and 
tobacco  ;  of  import  duties  on  materials  of  manu- 
facture and  the  articles  of  the  laborer's  con- 
sumption; of  the  management  of  our  surplus 
revenue  ;  and  the  whole  sub-treasury  system. 
It  is  a  serious  task,  as  imperatively  demanded  as 
it  is  difficult  of  execution.  It  calls  for  a  knowl- 
edge of  taxation  methods  in  other  countries  than 
our  own ;  and  offers  a  tempting  field  for  ener- 


THE   STUDY  OF  POLITICAL  ECONOMY.       37 

getic  and  manly  endeavor.  In  the  coming  years 
the  tariff  will  be  one  of  the  chief  political  issues, 
and  as  never  before  will  it  be  discussed  purely 
on  economic  grounds.  Hitherto  the  question 
has  been,  Shall  heavy  customs-duties  be  levied 
for  revenue  with  which  to  continue  the  war,  or 
pay  off  the  war-debt  ?  Now  the  question  is,  since 
the  originating  cause  has  disappeared,  Shall  the 
tariff  be  retained  because,  purely  in  itself,  it  is 
economically  best  for  the  whole  interests  of 
the  country? 

4.  But,  perhaps,  no  matter  excites  more  sen- 
timental interest  than  the  story  of  the  rise  of 
our  merchant  shipping  until  about  the  year 
1856,  and  of  the  subsequent  steady  and  per- 
sistent decline  of  our  tonnage  to  the  present 
day.  Out  of  conditions  originating  a  century 
ago  enactments  have  found  their  way  into  our 
statutes  which  are  as  much  out  of  place  as  snow 
storms  in  June.  A  junto  of  selfish  interests 
unite  to  protect  these  barbarisms.  Ship-build- 
ers are  engaged  in  an  industry  the  products  of 
which  (ships)  are  absolutely  forbidden  importa- 
tion into  the  United  States,  not  even  if  duties 
are  paid  on  them  as  on  the  products  of  other 


38       THE   STUDY  OF  POLITICAL  ECONOMY. 

industries.  Such  a  prohibition  exists  for  no 
other  article.  Moreover,  owners  of  vessels,  curi- 
ously enough,  are  exposed  to  open  competition 
in  our  own  ports  on  equal  terms  with  the  citi- 
zens of  other  countries  in  all  parts  of  the 
world ;  but  the  foreigner  is  permitted  to  come 
into  our  ports  with  a  carrying  instrument, 
bought  in  whatever  country  he  may  buy  it 
most  cheaply,  while  the  American  owner  must 
buy  his  ships  here,  where  the  cost  per  ton  is 
very  much  greater  than  abroad.  In  this  way, 
with  an  instrument  costing  an  American  more 
money  than  it  does  the  foreigner,  the  foreigner 
is  nevertheless  now  permitted  to  compete  with 
him  without  restrictions.  No  wonder  ship-mas- 
ters can  not  carry  as  cheaply  as  foreigners,  even 
if  they  exact  no  lower  rate  of  profit ;  no  wonder 
the  percentage  of  exports  and  imports  carried 
in  American  vessels  has  dwindled— apart  from 
the  influences  of  other  bad  laws— from  82.9  per 
cent,  in  1840  to  15.5  per  cent,  in  1882.  The 
problem  of  our  shipping  needs  the  touchstone 
of  some  wider  training  than  is  furnished  by  self 
ish  individual  interests.  Our  self-complacency 
may  be  soothed,  perhaps,  by  the  reflection  that 


THE  STUDY  OF  POLITICAL  ECONOMY.      39 

the  preservation  of  injurious  laws  on  the  statute- 
books  is  a  marked  characteristic  of  conserva- 
tism, even  in  a  republic. 

5.  Discussions  on  the  nature  and  value  of 
paper  money  have  formed  an  important  part 
of  political  campaigns  in  the  past,  and  it  had 
been  hoped  that  the  paper-money  demon  had 
been  laid.  The  inflation  and  contraction  of  our 
circulating  medium  were  the  shibboleths  of 
hostile  camps,  who  almost  monopolized  public 
attention  for  some  years.  It  was  once  thought 
that  our  legal-tender  notes  were  a  temporary  re- 
source, made  possible  at  the  most  only  in  time 
of  war  and  distress ;  but  we  can  no  longer  feel 
that  this  position  is  a  refuge.  The  Supreme 
Court,  by  the  decision  of  Judge  Gray,  has  most 
unfortunately  decided  that  Congress  has  the 
power  to  issue  legal-tender  notes  in  times  of 
peace  and  when  under  no  stress  of  a  war  neces- 
sity ;  a  situation  all  the  worse,  because  Congress 
is  made  the  sole  judge  of  the  necessity  for  the 
issue.  As  matters  now  stand,  all  the  trouble- 
some and  intricate  discussions  on  the  question 
of  paper  money,  which  we  once  thought  had 
been  settled  forever,  are  still  possibilities  of 


40       THE  STUDY  OF  POLITICAL  ECONOMY. 

the  future,  and,  if  Congress  should  so  choose, 
it  might  repeat  at  this  day  all  the  errors  which 
have  made  the  words  "  continental  currency  "  a 
by-word  for  absence  of  value.  It  would  be 
discouraging  to  think  that  the  same  battle 
must  be  fought  over  again,  were  it  not  that 
we  recognize  the  lack  of  simple  and  elementary 
instruction  on  these  subjects  in  the  only  schools 
where  the  mass  of  our  voters  are  educated. 
At  present,  the  newspaper  and  the  political 
speaker  are  the  only  means  of  instruction  on 
these  subjects  which  reach  the  majority  of  the 
American  people.  The  common  schools  give 
no  teaching  on  such  essential  matters.  And  on 
the  question  of  the  best  circulating  medium  for 
the  United  States  there  will  be  wanted,  in  the 
future,  the  best  learning  and  the  best  ability 
of  this  and  the  coming  generations.  The  pres- 
ent state  of  affairs  can  only  be  a  temporary 
one ;  we  do  not  have  one  thing  or  the  other, 
a  policy  for  or  against  our  present  Government 
issues.  We  simply  acquiesce,  because  they  give 
us  no  trouble  for  the  time  being. 

6.  A  farmer  with  a   large  orchard  scarcely 
notices  the   loss  of    a  few   apples ;   but   when 


THE  STUDY  OF  POLITICAL  ECONOMY.      4I 

poachers  actually  extend  their  operations  to 
taking  away  his  trees,  the  sources  of  his  wealth, 
he  is  likely  to  become  more  vigilant.  In  much 
the  same  way,  it  may  be  said  that  the  United 
States  is  becoming  interested  in  the  policy  of 
our  public-land  system.  We  are  lately  awaken- 
ing to  the  fact  that  we  have  had  no  consistent 
economic  policy  in  regard  to  our  public  lands 
and  the  settlement  of  our  vast  Western  domain ; 
and  yet,  as  concerns  the  principles  of  land 
tenures  and  of  the  distribution  of  wealth,  a  lack 
of  policy  is  of  momentous  interest  to  our  coun- 
try. The  public  lands  are  rapidly  drifting  out 
of  the  hands  of  the  general  Government,  and 
no  one  seems  to  have  cared  much  what  dis- 
position was  made  of  them.  Now  that  they 
are  nearly  gone,  now  that  the  dwindling  is 
apparent,  we  are  coming  to  interest  ourselves 
in  their  fate ;  but  the  possibilities  of  good  are 
fast  disappearing  under  the  cloud  of  accom- 
plished facts,  where  nothing  can  be  done.  Will 
an  educated  public  opinion  make  land-thieving 
too  bold  a  process  to  warrant  an  attempt  at  it  ? 
We  laud  the  ownership  of  homes  by  workmen ; 
we  hear  much  talk  of  the  nationalization  of  land 


42       THE   STUDY  OF  POLITICAL  ECONOMY. 

in  place  of  private  property ;  but  there  is  little 
attention  given  to  the  question  whether  the 
"  unearned  increment "  might  not  be  retained  in 
the  case  of  land  which  has  never  as  yet  become 
private  property.  Would  it  not  be  to  the  in- 
terest of  social  safety  to  encourage  the  existence 
of  a  large  body  of  yeomen  resident  on  the  land  ? 
Here  are  matters  needing  grave  and  serious 
consideration. 

7.  The  questions  of  the  day  of  an  economic 
character  are  startlingly  large  in  their  impor- 
tance. The  mere  mention  of  the  word  "  rail- 
way "  brings  before  the  mind  a  congeries  of 
difficult  questions  affecting  western  farmers, 
the  ability  of  the  State  to  regulate  freight  and 
passenger  charges,  and  in  short  the  whole 
vexed  discussion  of  State  interference.  Rail- 
ways afford  probably  the  largest  field  of  invest- 
ment in  the  country,  and  the  settlement  of  a 
.policy  of  supervision  and  regulation  for  them 
will  affect  the  wealth  and  income  of  unnum- 
bered small  shareholders  in  every  part  of  the 
Union.  No  other  branch  of  industry  affects  so 
large  a  number  of  our  population,  directly  or 
indirectly.  And  yet  a  supine  public  allows 


THE  STUDY  OF  POLITICAL  ECONOMY.       43 

Congress  to  rush  bills  of  vital  importance 
through  the  various  steps  to  final  enactment 
without  debate  or  due  consideration,  and — so 
far  as  most  people  are  concerned — in  perfect 
ignorance  of  the  motives  which  caused  the 
legislation. 

8.  It  will,  doubtless,  be  wearisome  to  more 
than   mention   the   topics  of  Postal  Telegraph, 
Chinese  Labor,  Strikes,  Trades  Unions,  Commu- 
nism, Co-operation,  and  Commercial  Crises,  all 
of   which  demand    present    attention,   because 
every  day  we  are  acting  in  regard  to  them  on 
either  a  good   or  a  bad    conception,  yet    for 
whose  treatment  the  nicest  discrimination  and 
knowledge  are  constantly  demanded. 

9.  But,  so  far,   I   have   confined   myself  to 
speaking    of    public    economic   questions    con- 
cerned only  with  our  domestic  relations.     Leav- 
ing these  behind,  however,  we  shall  find  quite 
as  important  problems  pressing  for  solution  in 
regard  to  our  intercourse  with  other  countries. 
So  long  as  we  were  the  only  civilized  people  of 
any  moment  on  the  Western  Continent,  the  posi- 
tion  we   were   to   take   toward   our  neighbors 
never  gave  us  much  need  for  reflection.     Mean- 


44       THE  STUDY  OF  POLITICAL  ECONOMY. 

while,  the  growth  of  modern  commerce,  the  ex- 
pansion of  populous  areas  north  and  south  of  us, 
the  discovery  of  great  mineral  wealth  outside  of 
our  own  limits,  inviting  our  enterprise  and  capi- 
tal, has  forced  upon  us  the  consideration  of  re- 
ciprocity with  Canada,  Mexico,  and  the  West 
Indies.  We  have  refused  reciprocity  to  Canada, 
but  we  are  considering  the  desirability  of  grant- 
ing closer  commercial  relations  with  Mexico, 
and  are  dallying  with  the  Spanish  West  Indies. 
People  are  asking  what  is  the  reason  for  a  re- 
ciprocity treaty  ?  What  part  does  it  form  in  any 
consistent  scheme  of  intercourse  with  foreign 
nations?  And  here,  again,  economic  informa- 
tion is  demanded  by  the  community. 

From  this  brief  outline  of  the  questions  of 
the  day,  it  is  easily  seen  how  imperative  a  de- 
mand exists  for  economic  training,  should  any 
one  aspire  to  become  a  member  of  our  National 
Legislature,  or  even  to  cast  an  intelligent  vote 
for  such  a  member  to  represent  us  in  it.  These 
are  matters  which  should  necessarily  be  made 
subjects  of  instruction  in  our  schools  and  col- 
leges. That  a  majority  of  public  measures  are 
economic  is,  from  the  foregoing  review,  a  propo- 


THE   STUDY  OF  POLITICAL  ECONOMY.       45 

sition  which  no  one  can  impeach.  Consequent- 
ly, a  heavy  responsibility  lies  upon  our  institu- 
tions of  learning  to  meet  the  new  demands  in 
a  fitting  manner,  and  upon  the  youth  of  the 
land  to  get  adequate  preparation  for  their  civic 
duties. 

I  could  wish,  however,  that  these  were  the 
only  reasons  why  Americans  should  be  obliged 
to  secure  economic  training,  or  why  our  educa- 
tional forces  should  be  strengthened  on  this 
side.  But  stronger  reasons  exist,  in  my  opin- 
ion, than  any  that  have  been  mentioned.  These 
are  to  be  found  in  what  I  may  call  the  economic 
portents.  To  the  present  time  we  have  been 
usually  known  as  a  "young  country,"  which  to 
the  economist  implies  an  abundance  of  cheap 
or  unoccupied  fertile  land,  a  relatively  scanty 
population,  large  returns  to  capital,  and  gener- 
ally high  wages.  A  full  knowledge  of  our  re- 
sources has  not  practically  been  reached  as  yet. 
These  splendid  resources  and  the  lusty  health 
of  our  young  country  have  made  it  possible,  to 
the  present  time,  for  legislators  to  blunder  with 
impunity.  With  great  industrial  productive- 
ness, due  to  an  embarrassment  of  natural  riches 


46       THE  STUDY  OF  POLITICAL  ECONOMY. 

and  the  industrial  capabilities  of  our  people,  labor 
and  capital,  while  constantly  receiving  larger  re- 
turns, would  not  naturally  be  over-critical  and 
hostile  to  each  other.  These  things  were  a  social 
protection  from  class  antagonisms.  But  is  it 
not  possible  that  we  are  soon  to  reach  a  stage 
when  the  strength  of  this  protection  will  be 
gradually  reduced?  Consider  what  is  happen- 
ing yearly.  The  young-country  theory  of  the 
past  has  led  to  the  encouragement  of  unlimited 
immigration,  because,  it  was  said,  our  prairies 
should  be  settled  and  our  towns  should  be  built 
up.  Streams  of  foreigners  have  been  arriving 
on  our  shores,  until  it  is  not  unlikely  that  we 
are  already  beginning  to  find  the  proportion  of 
population  to  land  a  less  favorable  one  than 
heretofore.  These  new-comers,  moreover,  do 
not  in  fact  all  go  upon  the  land,  but  remain  in 
the  cities,  like  standing  pools  of  dirty  water  in 
the  streets,  instead  of  being  drawn  off  entirely 
to  the  country  districts.  Indeed,  the  importa- 
tion of  uneducated,  un-American,  unrepublican 
workmen  from  foreign  lands  is  a  problem  in 
itself,  and  calls  loudly  for  some  political  and 
economic  qualification  before  these  aliens  should 


THE  STUDY  OF  POLITICAL  ECONOMY.       47 

be  admitted  to  the  franchise.  But,  whether 
voters  or  not,  these  men  reek  with  the  doctrines 
with  which  they  have  been  saturated  in  Euro- 
pean socialistic  resorts.  Such  of  them  as  come 
here  stay  in  the  cities :  they  have  no  dreams  of 
work  on  the  freshly-turned  soil  where  Heaven 
gives  a  plentiful  harvest  to  honest  labor.  Law- 
less communism — it  is  said  advisedly — feeds  on 
bad  workmen.  A  saving  mechanic  is  never  a 
communist.  Whatever  we  have  to  fear  from 
social  ferments,  wild  antagonisms  of  class 
against  class,  riotous  disturbances,  secret  drill- 
ing under  arms,  is  to  be  charged  against  per- 
sons of  the  former  description. 

But  this  is  by  no  means  the  true  ground  of 
distrust  in  the  future.  Whenever  the  time 
comes — and  come  it  must — when  the  "  young- 
country  "  situation  is  well  behind  us ;  when,  by 
an  increasing  population  and  a  closer  settle- 
ment, our  land  is  fully  occupied  ;  when  our  spe- 
cial resources  show  some  diminution  in  their 
richness ;  when  labor  and  capital  both  get  small- 
er rewards — then,  unless  economically  trained, 
even  honest  men,  finding  themselves  cramped 
by  barriers  of  their  own  creation,  but  brought 


48       THE   STUDY  OF  POLITICAL  ECONOMY. 

into  operation  by  natural  laws,  will  not  know 
what  is  really  happening,  and  in  entire  ignorance 
of  the  truth  may  fly  in  the  face  of  law  and  wreak 
signal  damage  on  society  as  the  supposed  cause 
of  their  evil  situation.  They  may  then  be  led 
into  doing  in  the  United  States  some  of  the 
things  they  are  now  doing  in  Europe.  The  day 
when  this  may  happen  with  us  is  more  or  less 
distant,  but  it  is  coming  nearer  in  proportion  as 
the  methods  of  men  accustomed  to  social  condi- 
tions in  old  and  crowded  countries  are  brought 
here  by  a  never-ending  stream  of  immigration. 
The  necessary  inference  from  this  exposition 
must,  it  seems  to  me,  be  very  clear  to  all.  We 
must  get  ready  to  give  economic  instruction  of 
a  simple  and  elementary  kind  in  every  common 
school  in  the  country,  in  such  a  way  that  it  shall 
reach  the  ordinary  voter,  and  influence  the  think- 
ing of  the  humblest  workman.  The  State  Legis- 
latures should  move  in  the  matter,  and  insert 
the  study  at  first  in  the  high  schools,  and  later 
into  the  lower  grades.  The  experiments  of  Will- 
iam Ellis  in  the  Birbeck  schools  in  England 
show  that  the  suggestion  is  not  at  all  visionary ; 
and  it  is  the  duty  of  intelligent  men  in  the  com- 


THE   STUDY  OF  POLITICAL  ECONOMY.      49 

munity  to  make  this  demand  upon  the  schools. 
He  who  feels  any  stake  in  the  experiment  of 
free  government  on  this  continent  would  fail  of 
his  whole  duty  did  he  not  urge  this  plan  as  the 
only  proper  means  to  enable  each  man  fittingly 
to  perform  his  duties  as  a  citizen. 

We  have  seen  that  the  war  has  plunged  us 
into  the  consideration  of  gigantic  questions  of 
an  economic  character,  and  that  the  growth  of 
our  country  in  numbers  and  wealth  is  making  a 
true  understanding  of  such  matters  more  neces- 
sary than  ever  to  the  prosperity  of  the  nation ; 
and  we  have  noticed  that,  as  a  result  of  the 
national  wind-shaking,  a  rising  tide  of  new  in- 
terest in  such  studies  is  becoming  unmistaka- 
bly evident  everywhere.  But  the  disheartening 
fact  is  no  less  true  that  these  new  and  impera- 
tive demands  are  met  only  by  meager  and  in- 
adequate means  in  the  chief  seats  of  learning,  to 
say  nothing  of  smaller  schools  and  colleges.  It 
is  a  surprising  fact  that  in  some  of  the  most  im- 
portant institutions  (even  including  those  whose 
courses  were  given  in  this  chapter)  there  is  no 
settled  instructor  in  this  branch  of  teaching.  It 
is  a  fact  of  my  experience  that  the  best  men  of 
5 


50       THE  STUDY  OF  POLITICAL  ECONOMY. 

the  university,  who  would  naturally  incline  to 
it,  can  not  now  find  a  career  in  economic  teach- 
ing, because  so  few  positions  exist  in  this  coun- 
try as  honorable  rewards  for  the  industry  and 
learning  of  ambitious  students.  Men  find  a  pro- 
fession in  teaching  Greek  and  Latin,  but  not  in 
teaching  political  economy.  Above  all  ought  it 
to  be  possible  to  find  groups  of  the  ablest  of  our 
young  men  collected  at  the  universities,  en- 
gaged in  advanced  economic  study,  writing 
monographs  and  investigating  home  problems, 
quite  as  much  as  they  should  study  the  geology 
or  mineralogy  of  our  own  land.  We  have  not 
yet  really  shown  what  kind  of  stuff  Americans 
are  made  of  for  economic  work.  Stimulate  in- 
vestigation and  conscientious  study  on  Ameri- 
can problems,  and  then  we  shall  probably  hear 
less  of  the  absence  of  any  school  of  economists 
among  us. 

Of  the  character  of  the  study  of  political 
economy,  the  mental  qualities  brought  into  play, 
and  the  methods  of  approaching  the  subject,  the 
reader  will  find  an  explanation  in  the  following 
chapters. 


CHAPTER  II. 

THE  CHARACTER  OF  POLITICAL  ECONOMY  AS  A 
STUDY. 

WALTER  BAGEHOT  once  said  of  certain  liter- 
ary economists,  who  had  no  bent  for  practical 
affairs,  that  they  were  "  like  astronomers  who 
had  never  seen  the  stars."  In  fact,  no  small 
number  of  people  believe  that  this  applies  to  all 
political  economists ;  that  they  do  very  well  as 
students  of  books,  but  are  unable  to  keep  their 
heads  in  the  midst  of  facts  and  actual  business ; 
and  that  only  the  "hard-headed"  merchant  is 
competent  to  explain  to  the  uninitiated  the 
causes  of  what  he  sees.  As  in  many  general 
beliefs,  there  is  something  just  and  right  in  this ; 
and  yet  there  is  something  too  which  is  not  in- 
cluded in  it,  which  leads  the  holder  of  the  belief 
to  narrow  and  illiberal  conclusions  in  regard  to 
a  very  important  study.  A  fair  and  candid  con- 
sideration should  be  given  to  the  qualities  of 


5 2        THE   STUDY  OF  POLITICAL  ECONOMY. 

mind  called  into  play  by  the  study  of  political 
economy,  and  then  we  may  more  easily  judge 
of  the  character  of  the  work  demanded  of  an 
economist,  and  of  the  way  in  which  these  de- 
mands have  been  met. 

It  is  axiomatic  that  not  every  person  can 
succeed  in  political  economy  any  more  than  in 
art  or  music.  Some  people,  although  admirably 
equipped  in  other  directions,  have  begun  the 
study  of  political  economy  with  great  zeal,  only 
to  realize  finally  that  anything  beyond  a  certain 
general  knowledge  and  use  of  its  principles  is 
denied  to  them.  Any  hint,  therefore,  although 
imperfect  as  mine  may  be,  of  a  knowledge  of 
the  mental  qualities  requisite  for  success  in  such 
a  study,  will  at  least  set  to  thinking  those  who 
propose  to  begin  it,  and  possibly  lead  those  who 
do  not  intend  to  study  it  to  consider  whether 
they  have  formed  a  right  judgment  upon  the 
work  already  accomplished  by  economists. 

The  mental  qualities  brought  into  use  by  po- 
litical economy  are  of  two  seemingly  opposite 
kinds ;  and,  simply  because  of  this  distinct  op- 
position between  them,  it  seldom  happens  that 
many  persons  combine  them  both  to  great  per- 


THE   STUDY  OF  POLITICAL  ECONOMY. 


53 


fection,  and  consequently  few  persons  have 
achieved  great  success  in  the  study.  To  illus- 
trate best  the  mental  operations  required,  let  me 
first  recount  briefly  the  process  followed  in  an 
economic  investigation.  Certain  phenomena  are 
observed,  and  their  accuracy  ascertained :  an 
hypothetical  explanation  deduced  from  existing 
principles  of  political  economy,  or  a  statement 
of  the  cause  operating  to  produce  the  observed 
phenomena,  is  made  on  the  best  possible  ground 
known  to  the  investigator ;  a  process  of  verifi- 
cation then  follows,  wherein  the  hypothetical 
principle  is  applied  to  other  observed  economic 
facts  ;  and,  if  it  explains  the  given  conditions  in 
all  known  cases  to  which  it  is  applied,  the  law 
is  considered  established — just  as  we  proceed  to 
discover  a  law  in  physics  (although  the  econo- 
mic law  is  not  capable  of  quantitative  accuracy 
in  statement  like  the  physical  law).  First,  there 
is  observation,  then  deduction  *  from  the  basis 

*  Deduction  is  the  process  of  reasoning  from  a  general  to  a 
particular,  and  is  opposed  to  induction,  as  thus  defined  by  Mr. 
Mill :  "  The  process  by  which  we  conclude  that  what  is  true  of 
certain  individuals  of  a  class  is  true  of  the  whole  class,  or  that 
what  is  true  at  certain  times  will  be  true  in  similar  circumstances 
at  all  times,"  "  System  of  Logic,"  book  iii,  chap,  ii,  §  i.  In  the 


S4       THE   STUDY  OF  POLITICAL  ECONOMY. 

of  established  laws,  in  order  to  explain  the  ob- 
served facts,  and  lastly  inductive  verification, 
with  a  severe  and  exacting  standard.  Or,  to 
again  use  the  words  of  Bagehot,  we  act  as  if  a 
man  were  arrested  under  suspicion  of  murder : 
a  murder  was  known  to  have  been  committed, 
and  the  doer  of  the  crime  has  been  suspected ; 
and  then,  if,  on  resort  to  legal  and  just  proof,  the 
suspicion  is  found  correct,  he  is  declared  guilty. 
Likewise,  when  economic  phenomena  are  ob- 
served, the  law  expressing  the  relation  between 
cause  and  effect  is  suspected ;  and  if,  on  corn- 
earliest  stage  of  economic  science  induction  was  used,  as  in  the 
physical  sciences,  whose  history  is  thus  described  :  "  A  long 
period  of  laborious  inductive  research,  during  which  the  ground 
is  prepared  and  the  seed  sown,  terminating  at  length  in  the  dis- 
covery— most  frequently  made  at  nearly  the  same  time  by  several 
independent  inquirers — of  some  one  or  two  great  physical  truths  ; 
and  then  a  period  of  harvest,  in  which,  by  the  application  of  de- 
ductive reasoning,  the  fruits  of  the  great  discovery  in  the  form 
of  numerous  intermediate  principles,  connecting  the  higher  prin- 
ciples with  the  facts  of  experience,  are  rapidly  gathered  in.  ... 
But  it  is  not  in  the  discovery  of  axiomata  media  only  that  the  po- 
tency of  the  deductive  process  has  been  exemplified.  ...  Of 
this  the  most  eminent  example  is  the  law  of  gravitation  itself, 
arrived  at  by  Newton  in  the  main  by  way  of  deduction,  from  the 
dynamical  premises  supplied  by  Galileo."  The  problem  was  "  to 
find  a  force  which,  in  conjunction  and  in  conformity  with  the  laws 
of  motion,  will  produce  the  planetary  movements,  already  general- 
ized by  Kepler."  Cairnes,  "  Logical  Method,"  pp.  84,  85. 


THE  STUDY  OF  POLITICAL  ECONOMY.      55 

parison  with  the  facts,  this  law  is  wholly  sub- 
stantiated— as  it  were,  "  found  guilty  " — it  is 
considered  established. 

By  the  deductive  part  of  the  process,  the 
logical  and  reasoning  powers  are  called  forth  in 
a  marked  degree.  Hence  economic  study 
needs,  and  in  its  processes  gives,  the  discipline 
of  the  severer  logical  and  mathematical  sub- 
jects. And  some  years  of  observation  in  the 
class-room  warrant  the  statement  that,  as  a 
rule,  he  who  enjoys  and  masters  mathematical 
and  logical  work  will  succeed  with  political 
economy,  provided  he  has  to  some  extent  also 
the  other  necessary  mental  qualities.  What 
these  other  qualities  are  may  be  seen  by  consid- 
ering that,  in  the  verifying  part  of  the  process 
above  described,  an  imperative  need  exists  for 
an  honest,  practical  appreciation  of  facts,  such  as 
is  possessed  by  merchants  and  men  of  affairs, 
coupled  with  an  economic  intuition,  a  faculty 
which  is  more  or  less  inborn.  Whether  this 
economic  intuition  is  a  matter  of  cultivation  or 
not,  I  do  not  feel  that  my  experience  is  extended 
enough  to  decide ;  but  I  am  inclined  to  the  be- 
lief that  it  is.  The  capacity  to  collect  and  ar- 


56       THE  STUDY  OF  POLITICAL  ECONOMY. 

range  facts  is  a  book-keeper's  function  ;  but  the 
ability  to  see  through  the  confusing  mass  of  de- 
tails and  trace  the  operation  of  a  governing 
principle  requires  an  intuitive  regard  for  facts 
and  their  causes  possessed  in  a  large  measure 
hitherto  by  only  a  few  men. 

If  this  analysis  be  a  true  one,  it  will  appear 
distinctly  how  it  is  that  qualities  almost  diamet- 
rically opposed  to  each  other  are  necessary  for 
the  equipment  of  an  economist  of  the  first  rank. 
On  the  one  hand,  he  must  have  the  power  of 
close,  sustained,  and  logical  reasoning;  on  the 
other,  he  must  have  a  most  thoroughly  practical 
spirit,  without  vagaries  and  nonsense.  The  for- 
mer he  gains  chiefly  by  his  academic  training ; 
the  latter,  by  general  maturity  and  an  intuitive 
or  practical  knowledge  of  the  world  of  business. 
In  short,  he  must  be  at  once  a  (so-called)  "  doc- 
trinaire "  and  a  "  practical  man."  To  be  with- 
out one  set  of  these  faculties  is  to  seriously  and 
fatally  prevent  any  great  usefulness.  A  purely 
"  practical  man,"  without  the  logical  training, 
can  no  more  achieve  economic  success  than  a 
railway  -  locomotive,  no  matter  how  great  its 
steam-power,  can  continue  to  run  and  reach  its 


THE   STUDY  OF  POLITICAL  ECONOMY.       57 

destination  without  rails.  And  yet,  a  bookish 
and  literary  economist,  without  the  practical 
intuitions,  can  accomplish  nothing  more  than  a 
finely  finished  and  most  perfect  engine  in  the 
hands  of  an  ignoramus  who  does  not  know  how 
to  get  up  steam. 

We  here  find  the  explanation  of  a  very 
common  belief  among  the  wide  ranks  of  the 
busy  and  successful  men  of  affairs  in  the  United 
States — a  class  who  have  generally  had  little 
academic  training  —  that  economists  are  mere 
"  doctrinaires,"  whose  assumptions  are  all  a 
priori,  all  in  the  air,  and  above  the  level  of 
every-day  work;  who  had  better  make  a  for- 
tune in  pig-iron,  or  fancy  dress-goods,  before 
they  set  up  to  instruct  the  community.  Merely 
making  money,  however,  does  not  at  the  same 
time  make  one  logical.  It  is  as  if  we  should  de- 
mand that  every  scientific  physicist  or  chemist 
should  have  first  put  his  knowledge  into  prac- 
tice by  inventing  an  automatic  brake,  or  a  pat- 
ent-medicine, before  he  is  competent  to  impart 
the  principles  of  his  science  to  others.  The 
contempt  of  the  practical  world  for  (so-called) 
"  doctrinaires "  is  as  great  a  mistake  as  for  the 


5  8       THE   STUDY  OF  POLITICAL  ECONOMY. 

speculative  writers  to  set  themselves  above  the 
men  of  affairs.  As  in  most  questions  involving 
both  mental  and  material  considerations,  the 
just  position  lies  somewhere  between  these 
extreme  views.  If  an  economist  is  an  ab- 
stract thinker,  and  nothing  else  —  unable  to 
verify  his  deductions  —  then  he  justly  merits 
contempt ;  but  in  that  case  he  is  not  a  prop- 
erly equipped  man,  as  we  have  described  him 
above.  On  the  other  hand,  it  is  common 
to  see  merchants  or  manufacturers  showing 
great  energy  in  studying  and  writing  upon  eco- 
nomic subjects,  who,  so  long  as  they  confine 
themselves  to  the  range  of  facts  within  the 
limits  of  their  own  horizon,  make  most  valuable 
and  effective  contributions  to  the  verification  of 
principles  ;  but,  when,  without  accuracy,  logical 
power,  or  a  grasp  upon  governing  principles, 
they  begin  to  lay  down  general  propositions 
based  on  their  limited  knowledge  of  particular 
facts,  they  are  very  apt  to  be  less  effective  and 
useful  than  they  are  dogmatic.  They  will  find 
that  their  general  principle,  owing  to  its  insuf- 
ficient basis,  will  conflict  with  truths  already 
established,  and  whose  correctness  they  must 


THE  STUDY  OF  POLITICAL  ECONOMY.       59 

necessarily  deny  in  order  to  make  room  for 
their  little  theory.  He  only  is  truly  an  econo- 
mist who,  eagerly  studious  of  facts,  not  in  one 
occupation  or  place  only,  but  in  as  many  as  pos- 
sible, applies  scientific  processes  to  his  investi- 
gation, and  produces  that  which  becomes  the 
world's  truth,  the  property  of  men  of  all  times 
— not  the  petty  sum  of  thought  which  compre- 
hends only  a  small  fraction  of  the  facts.  In 
other  words,  when  a  wide-awake  man  goes  to 
books,  he  really  goes  to  get  the  experience  of 
the  best  observers  of  all  countries  with  which  to 
correct  himself  against  false  and  narrow  infer- 
ences drawn  from  his  own  limited  experience. 
In  order  to  show  how  far  this  analysis  is 
based  on  experience,  I  shall  appeal  to  the  his- 
tory of  the  work  of  the  most  successful  econo- 
mists. Such  an  historical  survey  will,  in  my 
opinion,  give  results  of  an  interesting  and  in- 
structive kind.  Adam  Smith,  Ricardo,  Mill, 
and  Cairnes  combined  in  a  high  degree  the  two 
almost  opposite  kinds  of  powers  needed  for 
their  success ;  and  these  men  have  made  the 
most  considerable  contributions  to  our  present 
knowledge  of  economic  principles. 


60       THE   STUDY  OF  POLITICAL  ECONOMY. 

It  would  be  hard  to  name  an  author  who  has 
wielded  a  greater  influence  by  his  writings  than 
Adam  Smith  by  his  "  Wealth  of  Nations  "(1776). 
His  work  was  a  great  and  admitted  success,  as 
tried  by  any  tests,  whether  of  popularity  or 
permanent  influence  on  men's  minds.  But  on 
his  tombstone  will  be  found  inscribed  the  name 
of  an  extensive  ethical  work,  "  The  Theory  of 
Moral  Sentiments,"  as  an  equal  claim  to  dis- 
tinction with  the  "  Wealth  of  Nations."  What 
is  worth  noting  about  this  is  that  the  great 
writer  was  a  Professor  of  Moral  Philosophy  in 
Glasgow,  and  had  planned  an  extensive  course 
of  lectures  in  which  political  economy  formed 
but  one  part ;  and  we  find  that  by  training,  by 
aptitude,  by  study,  he  was  a  skillful  master  of 
logic ;  he  had  the  power  to  proceed  from  a 
given  premise  to  its  logical  conclusion,  and  to 
see  the  principles  which  followed  from  the  ac- 
ceptance of  a  given  position ;  he  could  hold  to 
an  abstraction,  in  the  form  of  general  truth,  un- 
weighted by  the  concrete  accidents  of  form  in 
which  it  might  be  at  any  time  working ;  and  it 
was  his  pre-eminent  ability  in  securing  a  firm 
grasp  upon  principles,  apart  from  their  applica- 


THE  STUDY  OF  POLITICAL  ECONOMY.       6r 

tion,  which  gave  him  later  a  scientific  and  sys- 
tematic control  over  his  subject,  and  enabled 
him  to  weld  it  into  a  compact  and  cohering 
whole.  It  was  this  power  which  made  it  pos- 
sible for  him  to  lay  the  foundations  of  a  science 
of  political  economy.  It  widened  his  views, 
and  made  it  easy  for  him  to  see  the  connection 
of  one  part  of  truth  with  the  whole.  In  short, 
he  possessed  in  a  remarkable  degree  a  logical 
and  philosophic  faculty,  the  first  of  the  two 
requisites  for  successful  economic  work.  But, 
then,  to  an  almost  equal  extent,  he  honestly 
reverenced  industrial  and  commercial  facts ;  he 
studied  them  eagerly,  and  made  his  book  an  ex- 
tensive collection  of  data  on  many  special  sub- 
jects. Everywhere  on  his  pages  one  meets  with 
the  analysis  and  study  of  particular  industrial 
phenomena  to  which  his  principles  were  ap- 
plied ;  and  in  them  the  keen,  observing  Scotch- 
man, with  a  subtle,  economic  instinct,  saw  the 
operation  of  laws  where  the  ordinary  man  of 
affairs  saw  only  a  crowd  of  familiar  and  mo- 
notonous details  of  business.  The  practical  na- 
ture of  his  work  is  so  well  known  that  it  seems 

unnecessary  to  call  further  attention  to  this  side 
6 


62        THE  STUDY  OF  POLITICAL  ECONOMY. 

of  his  make-up.  So  well  has  this  been  under- 
stood, that  the  late  Cliffe-Leslie  claimed  for 
Adam  Smith  that  his  method  of  working  was 
solely  inductive,  that  is,  by  a  method  of  reason- 
ing directly  from  particular  facts  to  the  general 
truth.  A  more  liberal  view  of  all  the  powers 
and  surroundings  of  the  great  economist  will 
not  allow  us  to  agree  to  this.  And,  as  we  try 
to  take  in  the  whole  man,  rather  than  any  part 
of  him,  we  are  brought  to  the  broader  conclu- 
sion that  it  was,  without  question,  the  union  of 
a  philosophic  and  logical  faculty,  which  enabled 
him  to  deduce  his  principles  from  ascertained 
premises,  with  a  true  and  correct  instinct  in  the 
application  of  these  laws  to  facts,  which  lay  at 
the  bottom  of  Adam  Smith's  world-wide  success 
in  his  "  Wealth  of  Nations."  He  had  the  power 
to  see  the  law  working  in  the  concrete ;  to  dis- 
close the  operating  force;  to  shake  off  the  in- 
cidental circumstances  of  its  concrete  envelope, 
and,  after  verifying  his  conclusions,  formulate 
them  in  simple  terms  for  use  by  others  in  sub- 
sequent explanations.  The  great  Scotchman 
was  at  once  the  prince  of  "  doctrinaires,"  and 
the  most  practical  man  of  his  time. 


THE  STUDY  OF  POLITICAL  ECONOMY.      63 

Curiously  enough,  while  Adam  Smith  ap- 
proached political  economy  from  the  side  of 
abstract  and  metaphysical  studies,  his  "  homely 
sagacity  "  led  him  constantly  to  practical  re- 
sults, Ricardo  approached  the  study  as  a  rich 
banker  and  a  successful  man  of  business,  who 
had  early  retired  with  a  competence  ;  but  yet  it 
was  Ricardo  who,  above  all  others,  went  farthest 
in  attempting  to  formulate  the  principles  he  had 
arrived  at  in  a  form  which  stated  abstractly  the 
general  truths,  independent  of  the  changing  con- 
ditions in  which  these  principles  worked.  So 
that  in  him  we  have  a  man  of  economic  intuitions 
of  the  most  practical  kind,  but  one  who  early 
showed  a  fondness  for  mathematics  and  logical 
studies.  Knowing  only  too  well  the  myriad 
shapes  in  which  facts  arise  before  us,  he  was 
urged  forward  by  a  desire  to  express  truth  in  a 
form  as  succinct  and  universal  as  possible. 
This  tendency  of  his  mind,  taken  in  connection 
with  unusual  terseness  and  no  great  literary 
skill  in  exposition,  has  deceived  people,  chiefly 
because  of  his  dry  and  peculiar  method  of  stat- 
ing himself,  into  thinking  that  his  conclusions 
were  all  based  on  unsubstantial  premises ;  while, 


64       THE  STUDY  OF  POLITICAL  ECONOMY. 

as  a  matter  of  fact,  he  was  a  hard-headed  man 
of  affairs,  living  at  a  time  when  the  Bank  of 
England  restriction  act  and  the  duties  on  corn 
led  him  to  try  to  find  out  the  fundamental 
principles  which  were  governing  the  value  of 
money  and  the  price  of  corn.  The  results  of 
these  practical  investigations  were  seen  in  the 
doctrines  of  the  "  Bullion  Report,"  and  the  eco- 
nomic doctrines  of  "  Rent "  and  "  International 
Trade."  *  In  this  way  the  work  of  the  Scotch 

*  No  one  has  been  more  attacked,  and  less  understood,  than 
Ricardo.  That  he  made  proper  use  of  the  scientific  methods  can  be 
seen  by  a  brief  quotation.  In  the  following  words  Mr.  Cairnes  has 
shown  how  he  made  use  of  hypothesis,  which  is  analogous  to  experi- 
ment in  the  physical  sciences :  *'  The  question  under  consideration 
was  the  fundamental  principle  of  international  trade,  and  Ricardo 
wished  to  show  that  it  might  be  the  interest  of  a  country  to  import 
an  article  from  another,  even  though  it  were  in  its  power  to  produce 
the  imported  article  itself  at  less  cost  than  it  was  produced  at  in 
the  country  from  which  it  came.  This,  at  first  view,  paradoxical 
position,  Ricardo  thus  by  means  of  a  simple  hypothesis  (which, 
while  it  divested  the  problem  of  all  its  accidental  complications, 
brought  into  clear  light  the  few  essential  conditions  on  which  its 
solution  depended)  was  enabled  to  establish  ;  it  being  evident 
that,  under  the  supposed  circumstances,  the  known  motives  of 
men  in  the  pursuit  of  wealth  could  only  lead  to  the  very  result 
asserted.  '  Two  men,'  he  says,  '  can  both  make  shoes  and  hats, 
and  one  is  superior  to  the  other  in  both  employments  ;  but  in 
making  hats  he  can  only  exceed  his  competitor  by  one  fifth,  or  20 
per  cent.,  while  in  making  shoes  he  can  excel  him  by  one  third,  or 
33  per  cent.  ;  will  it  not  be  to  the  interest  of  both  that  the  supe- 


THE  STUDY  OF  POLITICAL  ECONOMY.       65 

Professor  of  Logic,  who  had  a  great  deal  of 
practical  insight,  was  supplemented  by  the 
study  of  a  successful  man  of  affairs  who  had  a 
strong  passion  for  concise  and  abstract  state- 
ment of  economic  principles.  We  can  not 
properly  say  of  the  man  who  was  introduced  to 
the  details  of  the  money  market  at  fourteen, 
was  in  business  on  his  own  account  at  twenty- 
one,  and  was  a  wealthy  man  at  twenty-five,  that 
he  was  a  doctrinaire  wholly  given  over  to  ab- 
stract speculations. 

John  Stuart  Mill  illustrates  what  we  have 
said  in  a  different  way.  To  him  the  fascination 
of  abstract  reasoning  was  so  great,  and  the  bent 
of  his  mind  so  strongly  metaphysical,  that  this 
part  of  the  economist's  equipment  preponderated 
in  his  make-up ;  while  his  attention  to  the  facts 
of  practical  life  was  not  extensive.  And  this  ex- 
poses  whatever  of  weakness  there  is  in  his  book. 
Perhaps  no  other  systematic  writer  ever  gained 
such  success  by  perspicuous  treatment,  and  a 
certain  geometrical  symmetry  in  the  connection 

rior  man  should  employ  himself  exclusively  in  making  shoes,  and 
the  inferior  man  in  making  hats?'"  "Logical  Method,"  pp. 
93,  94- 


66       THE  STUDY  OF  POLITICAL  ECONOMY. 

of  parts  with  a  whole,  as  did  Mr.  Mill  in  his 
"  Principles  of  Political  Economy,"  and  this 
quality  has  greatly  added  to  the  value  of  his 
work.  But,  while  the  abstract  character  of 
many  of  his  chapters  excites  admiration  because 
.of  the  power  of  sustained  reasoning  which  they 
show,  yet  it  must  be  confessed  that  they  are 
too  often  ill-adapted  to  the  common  apprehen- 
sion. Had  he  possessed  more  knowledge  and 
acquaintance  with  practical  business  life,  been 
nearer  to  the  monotony  of  details,  his  work 
might  have  been  imbued  with  a  smack  of 
practicality  which  would  have  redeemed  its 
abstractness,  and  made  it  vastly  more  useful. 
Moreover,  he  would,  as  in  the  discussion  of  the 
wages  question,  have  adapted  his  principles 
more  correctly  to  the  truth,  and  gained  posi- 
tions less  likely  to  be  assailed  after  others  had 
noted  their  too  great  symmetry  and  too  few 
limitations.  His  early  training  accounts  for  his 
book  as  it  stands,  and  explains  his  faults.  Too 
much  stress  should  not,  however,  be  laid  on 
what  was  only  a  partial  lack  in  Mill's  practical 
experience.  Account  must  be  taken  of  the  life 
Mill  led  as  a  servant  in  the  East  India  Com  pa- 


THE  STUDY  OF  POLITICAL  ECONOMY.       £7 

ny's  office,  which  widened  his  horizon,  gave  his 
mind  practical  employment,  and  furnished  him 
with  a  great  field  of  experience  in  men  and 
things.  This,  without  doubt,  exercised  a  strong 
and  steadying  influence  on  his  thinking,  which 
had  some  of  the  faults  of  English  insularity, 
and,  taken  together  with  his  robust  philanthro- 
py, gave  that  practical  direction  to  his  work 
which,  while  it  was  inadequate,  yet  redeemed 
him  from  the  charge  of  being  unduly  given  over 
to  abstractions.  Had  he  had  an  interest  in 
work-a-day  things  which  equaled  his  fondness 
for  metaphysics  and  abstract  thinking,  he  would 
have  succeeded  even  more  than  he  did,  and  he 
made  a  great  success.  His  treatment  of  inter- 
national values  is  a  conspicuous  example  of  his 
faculty  for  extended  reasoning,  but,  had  he  put 
it  more  as  a  practical  man  of  affairs  and  less 
in  the  form  in  which  he  originally  worked  it  out, 
he  could  have  made  a  much  better  exposition 
of  the  principles,  and  gained  vastly  in  his  hold 
upon  the  reader.  Does  it  not  become  evident, 
then,  that  mere  philosophic  acumen  is  not  suffi- 
cient in  the  model  economist?  But,  on  the 
other  hand,  is  it  not  evident  that  the  ability  of 


68       THE  STUDY  OF  POLITICAL  ECONOMY. 

a  mere  man  of  affairs  is  not  sufficient  to  grasp 
the  workings  of  principles  in  the  confusion  of 
details  ?  These  two  sets  of  faculties  must  be, 
and  always  are,  combined  in  him  who  accom- 
plishes the  best  economic  work. 

The  personality  of  Mill's  great  successor, 
Mr.  Cairnes,  is  a  very  interesting  one.  He 
both  knew  and  thought  much.  Members  of 
Parliament  would  come  to  sit  by  his  invalid's 
chair,  in  which  he  was  confined  by  a  painful  dis- 
order, finally  ending  in  an  untimely  death,  and 
find  him  more  learned  than  they  in  the  details 
and  facts  of  certain  legislation ;  yet  with  this 
accumulation  of  practical  knowledge,  for  which 
he  had  a  peculiar  aptitude,  no  one  since  Ri- 
cardo  has  shown  so  vigorous  a  faculty  for  inves- 
tigation, and  the  power  of  keeping  his  head 
while  in  the  pursuit  of  principles.  He  was  not 
befogged  by  metaphysical  niceties,  but  saw  his 
way  through  the  complexity  of  actual  business 
life  with  as  sure  and  certain  an  insight  into  the 
actuating  causes,  and  with  as  clear  and  defi- 
nite a  view  of  the  principles  in  operation,  as  an 
expert  accountant  when  adding  a  column  of  fig- 
ures. In  his  little  volume,  "  The  Logical  Meth- 


THE  STUDY  OF  POLITICAL  ECONOMY.       69 

od,"  in  which  he  explains  his  ideas  as  to  the 
processes  to  be  followed  in  an  economic  inves- 
tigation, his  logical  and  philosophic  side  is  most 
admirably  seen.  Nowhere  else  does  he  seem 
more  clearly  to  show  how  essentially  he  had  the 
power  to  handle  a  purely  abstract  question, 
such  as  that  of  method.  And  yet,  on  the  other 
hand,  it  is  to  be  noticed  in  his  "  Leading  Prin- 
ciples "  that  the  whole  criticism,  by  which  he 
amends  Mr.  Mill's  positions — his  study  of  value, 
the  wages  question,  and  international  trade — 
shows  how  much  more  appreciation  he  had  of 
the  real  facts  of  trade  than  Mr.  Mill.  Under  the 
light  of  his  economic  insight  the  cold  columns 
of  Australian  statistics  and  American  exports 
and  imports  glow  with  brilliant  illustrations  of 
general  economic  laws.  With  a  firm  grasp  upon 
principles,  and  the  ability  to  see  their  operation 
in  practical  affairs,  he  examined  the  facts  of  our 
foreign  trade  before  1873,  and  came  to  the  con- 
clusion that  we  were  rapidly  accumulating  the 
material  for  a  great  financial  explosion — nay, 
he  even  actually  prophesied  the  panic  which 
came  in  that  year.  Scarcely  any  other  econo- 
mist affords  a  better  illustration  of  the  success 


;o       THE  STUDY  OF  POLITICAL  ECONOMY. 

arising  from  the  possession  of  these  two  almost 
wholly  unlike  powers  of  mind  which  I  have 
been  trying  to  show  are  essential  for  the  high- 
est achievement  in  political  economy.  Mr. 
Cairnes  was  an  economic  tight-rope  walker ;  he 
could  go  with  a  cool  head  through  airy  spaces 
where  other  men  became  dizzy  or  fell  to  the 
ground.  And,  at  the  same  time,  he  had  the 
Englishman's  sturdy  respect  for  facts,  with 
more  than  the  ordinary  Englishman's  willing- 
ness to  acquaint  himself  with  social  systems  dif- 
ferent from  his  own. 

These  economists,  whose  powers  I  have  at- 
tempted to  analyze,  have  been  the  ones  who 
have  contributed  most  to  our  knowledge  of 
the  principles  of  political  economy,  as  they 
are  understood  to-day.  Above  all  other  writers, 
these  men  have  possessed  a  useful  economic 
intuition,  and  a  respect  for  facts,  which  have 
given  peculiar  strength  to  their  clear,  abstract 
generalization  of  results  in  the  form  of  uni- 
versal principles.  They  have  been  able  to  rea- 
son from  ascertained  premises  to  conclusions 
with  steadiness  and  accuracy;  and  yet  they 
have  been  able  to  seek  the  facts  for  verification 


THE  STUDY  OF  POLITICAL  ECONOMY.       ^ 

and  illustration.  Wherever  other  students  and 
writers  have  accomplished  less,  it  will  appear 
that  weakness  arose  from  their  entire  or  par- 
tial lack  of  one  or  both  of  these  two  sets  of 
faculties. 

If  my  analysis  is  correct,  it  will  explain  some 
other  things  also.  French  writers  are  unex- 
celled in  the  power  of  lucid  statement ;  but  the 
generalizing  and  less  practical  French  (although 
there  are  exceptions)  are  not  so  likely  to  be 
good  economists  as  the  more  common-sense 
English.  Therefore,  although  the  French  have 
stated  results  in  the  most  admirable  way,  they 
have  not  originated  so  much  as  have  the  Eng- 
lish. It  is,  then,  reasonable  also  to  expect  that 
the  practical  Americans,  with  the  keen  insight 
of  their  men  of  affairs,  may  also  furnish  the 
material  for  excellent  economists,  whenever 
they  set  themselves  seriously  to  get  the  proper 
systematic  training.  For,  together  with  the 
zest  for  commerce,  the  Americans  probably 
possess  considerable  aptitude  for  logical  pro- 
cesses, if  they  care  to  cultivate  themselves. 

If  my  exposition  is  accepted,  it  will  now 
be  evident  what  sets  of  mental  qualities  are 


•j2       THE  STUDY  OF  POLITICAL  ECONOMY. 

most  demanded  by  this  study.  It  is  desirable, 
then,  not  only  that  he  who  thinks  of  beginning 
political  economy,  but  he  who  has  already 
given  it  some  attention,  should  question  wheth- 
er he  possesses  the  requisite  ability  for  gaining 
success.  This,  however,  should  not  deter  the 
man  of  but  average  capacity  from  seeking  an 
elementary  and  general  knowledge  of  its  prin- 
ciples. His  duty  as  a  citizen  demands  that ; 
but  he  may  well  consider  whether  the  prelimi- 
nary work  calls  out  in  him  any  real  interest, 
and  if  he  thinks  of  a  future  and  extended  course 
of  study,  whether  he  can  bring  to  it  the  quali- 
ties of  mind  above  described. 


CHAPTER   III. 

THE     DISCIPLINARY     POWER     OF     POLITICAL 
ECONOMY. 

IT  may  now  be  worth  while  to  explain  briefly 
some  of  the  evident  ways  by  which  the  study 
of  political  economy  disciplines  the  mind.  To 
most  persons  economic  knowledge  is  favorably 
recommended  because  of  its  extreme  usefulness 
to  every  citizen  who  casts  a  ballot ;  but  it  will 
be  found,  I  think,  that  its  value  as  a  mental  ex- 
ercise— apart  from  the  desire  to  get  useful  in- 
formation— is  one  of  the  main  considerations  to 
be  kept  in  mind  by  students. 

It  may  seem  somewhat  startling  to  say  of  so 
practical  a  subject  that,  in  a  pre-eminent  degree, 
it  calls  for  the  exercise  of  imagination.  "  That 
is  just  what  we  have  always  said,"  the  scoffers 
at  political  economy  say  at  once ;  "  so  does 
novel-writing  call  for  im  agination, jmd  a  novel- 
7 


74       THE   STUDY  OF  POLITICAL  ECONOMY. 

ist  is  about  as  well  fitted  for  the  economist's 
position  as  the  usual  abstract  thinker  who 
masquerades  as  a  teacher  of  political  econo- 
my." To  this  it  is  to  be  replied  that  imagina- 
tion is  one  of  the  chief  requisites  for  mathe- 
matical study  also ;  that  a  novelist  is  not  neces- 
sarily a  good  mathematician  goes  without 
saying.  The  simplest  propositions  of  solid 
geometry  require  the  exercise  of  imagination, 
as,  for  example,  in  the  picturing  of  forms  and 
solids  with  intersecting  planes,  while  the  most 
logical  student  of  the  severest  mathematical 
processes  is  called  on  for  the  exercise  of  this 
species  of  imagination.  Still,  as  Tyndall  says, 
"  There  are  Tories  even  in  science  who  re- 
gard imagination  as  a  faculty  to  be  feared 
and  avoided  rather  than  employed.  They 
had  observed  its  action  in  weak  vessels,  and 
were  unduly  impressed  by  its  disasters.  But 
they  might  with  equal  justice  point  to  ex- 
ploded boilers  as  an  argument  against  the  use 
of  steam.  Bounded  and  conditioned  by  co- 
operant  reason,  imagination  becomes  the 
mightiest  instrument  of  the  physical  discov- 
erer. Newton's  passage  from  a  falling  apple 


THE   STUDY  OF  POLITICAL  ECONOMY.       75 

to  a  falling  moon  was,  at  the  outset,  a  leap  of 
the  imagination."  * 

The  use  of  the  imagination  is,  in  my  opinion, 
still  more  necessary  in  political  economy  than 
in  the  natural  sciences,  or  in  mathematics.  I 
have  already  alluded  in  another  chapter  to  the 
place  occupied  in  economic  processes  by  hy- 
pothesis. The  following  case  given  by  Mr. 
Cairnes  f  will  furnish  a  good  illustration :  "  If, 
for  example,  [the]  purpose  be  to  ascertain  the 
relation  subsisting  between  the  quantity  of 
money  in  circulation  in  any  given  area  of  ex- 
change transactions  and  its  value,  [one]  might 
make  some  such  supposition  as  this:  I,  in  a 
given  state  of  productive  industry  a  certain 

*  "  Scientific  Use  of  the  Imagination,"  in  "  Fragments  of 
Science,"  p.  130.  Tyndall  himself,  in  the  same  essay  (p.  149), 
makes  use  of  the  same  intellectual  "  cart-horse "  in  speaking  of 
the  extreme  tenuity  of  interstellar  matter  :  "  Suppose  a  shell 
to  surround  the  earth  at  a  height  above  the  surface  which  could 
place  it  beyond  the  grosser  matter  that  hangs  in  the  lower  re- 
gions of  the  air — say  at  the  height  of  the  Matterhorn  or  Mont 
Blanc.  Outside  this  shell  we  have  the  deep-blue  firmament.  Let 
the  atmospheric  space  beyond  the  shell  be  swept  clean,  and  let 
the  sky-matter  be  properly  gathered  up.  What  is  its  probable 
amount  ?  I  have  sometimes  thought  that  a  lady's  portmanteau 
would  contain  it  all.  I  have  thought  that  even  a  gentleman's 
portmanteau — possibly  his  snuff-box — might  take  it  in." 

f  "  Logical  Method,"  pp.  90-91. 


76       THE  STUDY  OF  POLITICAL  ECONOMY. 

number  and  amount  of  exchange  transactions 
to  be  preferred  ;  2,  a  certain  amount  of  money 
in  circulation  ;  3,  a  certain  degree  of  efficiency 
(in  the  sense  explained  by  Mr.  Mill)  in  the  dis- 
charge of  its  functions  by  this  money  ;  4,  lastly, 
a  certain  addition  made  to  the  money  already  in 
circulation.  These  conditions  being  supposed, 
and  being  also  supposed  to  remain  constant,  the 
scene  of  the  experiment  would  be  prepared.  It 
is  true  the  action  of  the  added  money  can  not 
be  made  apparent  to  the  senses  of  the  econo- 
mist, or  to  those  of  his  hearers  or  readers,  but 
from  his  knowledge  of  the  purposes  for  which 
money  is  used,  and  of  the  motives  of  human 
beings  in  the  production  and  exchange  of 
wealth,  it  will  be  in  his  power  to  trace  the  con- 
sequences which  in  the  assumed  circumstances 
would  ensue.  These  he  would  find  to  be  an  ad- 
vance in  the  prices  of  commodities  in  propor- 
tion to  the  augmentation  of  the  monetary  circu- 
lation ;  a  result  from  which  he  would  be  justi- 
fied in  formulating  the  doctrine  that,  other 
things  being  the  same,  the  value  of  money  is  in- 
versely as  its  quantity."  From  this  it  can  be 
seen  how  prominent  a  part  the  exercise  of  the 


THE   STUDY  OF  POLITICAL  ECONOMY.       ^ 

imaginations  plays  in  an  economic  investigation. 
The  physicist  and  the  geologist  make  use  of  the 
same  power,  it  is  true,  but  it  seems  to  be  more 
important  to  the  economist  than  to  them.  Very 
often,  in  order  to  show  the  action  of  a  single  prin- 
ciple operating  by  itself,  we  must  separate  all 
conflicting  agencies  from  the  situation— just  as 
the  physicist  experiments  in  a  vacuum  exhausted 
of  air,  for  the  purpose  of  learning  the  full  effect 
of  a  force,  like  gravity,  when  acting  by  itself. 
The  economist,  however,  is  not  able  to  repro- 
duce a  given  situation  to  the  eye  or  ear,  as  is 
the  physicist.  He  can  not  pile  before  him  the 
exports  of  the  United  States  or  England,  or 
summon  before  him  the  laboring-class  or  the 
capitalists  of  a  country ;  he  must,  therefore, 
picture  to  himself  the  actual  facts,  just  as  the 
geometrician  does  the  forms  of  a  solid,  and  see 
how  the  operating  principle  works.  This  is 
very  far  from  "  theoretical  dreaming."  It  is  at 
once  a  most  difficult  process,  and  a  most  serious 
discipline  in  learning  how  to  think  on  such  sub- 
jects.* 

*  Expressing  himself  from  a  different  point  of  view,  Cliffe  Les- 
lie said :  "  Want  of  imagination  is  one  of  the  causes  of  the  inabil- 


7  3       THE  STUDY  OF  POLITICAL  ECONOMY. 

Not  only  in  the  advanced  methods  of  inves- 
tigation, however,  but  in  the  most  elementary 
economic  study  will  the  imagination  be  called 
into  requisition.  In  beginning  political  econo- 
my, the  perception  of  a  simple  general  princi- 
ple is  often  absurdly  easy,  but,  for  its  assimila- 
tion into  our  own  thinking,  it  is  necessary  that 
it  should  have  become  an  interpreter  of  facts 
everywhere  about  us.  To  this  end,  it  is  essen- 
tial for  us  to  apply  the  abstaction,  or  general  prin- 
ciple, in  every  possible  case,  to  some  concrete 
phenomenon.  To  illustrate  my  meaning  in  a 
simple  way,  it  is  one  thing  to  say  that  in  order  to 
have  value  a  commodity  must  satisfy  some  de- 
sire, and  be  hard  to  get ;  and  quite  another  thing 
to  be  able  to  call  up  in  the  mind  an  image 
which  will  show  the  application  of  the  principle. 
For  example,  to  a  shipwrecked  sailor  on  a 
rocky  island  a  bag  of  gold  has  no  value,  it  can 
satisfy  no  desire,  for  it  can  not  keep  him  alive. 
The  student  is  absolutely  forced  to  imagine  to 

ity  of  many  economists  to  emancipate  themselves  from  old  ab- 
stractions, generalizations,  and  formulas.  Their  minds  do  not  en- 
able them  to  realize  actual  phenomena,  and  to  test  theories  on  all 
sides  by  a  multitude  of  instances."  "Political  Economy  in  the 
United  States,"  in  "Fortnightly  Review,"  October  1880. 


THE  STUDY  OF  POLITICAL  ECONOMY.       79 

himself  concrete  conditions  whenever  he  is  read- 
ing a  statement  of  principles  by  an  author ;  if 
he  does  not  turn  the  subject  into  a  reality  in 
this  way  it  will  slip  away  from  him  like  any- 
thing else  on  which  he  exercises  merely  his  mem- 
ory. If  he  is  talking  about  rent,  he  must,  by 
his  imagination,  keep  before  him  a  picture  of  a 
farm  as  it  is  in  reality ;  he  must  call  up  the  con- 
crete in  an  image,  and  follow  out  the  expla- 
nation of  the  writer,  or  lecturer,  by  seeing  the 
changes  which  take  place  as  the  exposition 
proceeds.  I  can  not  too  much  emphasize  the 
importance  of  this  method  to  clear  thinking 
and  satisfactory  progress  in  political  economy. 
The  student  must  be  constantly  at  work  with 
his  imagination,  making  a  series  of  illustrations 
of  what  he  is  reading. 

It  is  largely  by  such  mental  exercise  as  this 
that  a  student  best  succeeds  in  assimilating  the 
body  of  principles  which  make  up  the  science  of 
political  economy.  It  has  been  frequently  said 
to  me,  "  I  can  understand  the  statements  of  the 
writer  easily,  but  I  do  not  seem  to  be  able  to 
use  the  idea  when  called  upon  to  explain  things 
in  a  different  connection."  This  is  exactly  the 


8o       THE   STUDY  OF  POLITICAL  ECONOMY. 

difficulty,  as  it  is  also,  by  struggling  with  the 
difficulty,  one  of  the  best  disciplinary  gains  of 
our  study.  If  the  student  had  conceived  in 
his  own  mind  an  image  of  the  principle  working 
in  some  definite  facts,  he  would  not  have  com- 
plained in  this  way  ;  the  less  so'  if  he  had  tried 
it  on  more  than  one  set  of  facts,  and  had  seen 
how  the  principle  operated  in  more  than  one  sup- 
posed case.  To  understand  an  abstract  princi- 
ple, without  the  ability  to  see  it  in  the  concrete 
form,  and  test  its  truth,  is  of  little  gain  to  any 
one.  This  would  in  truth  make  a  "doctri- 
naire." And  we  may  now  see  somewhat  more 
clearly  the  true  value  to  be  set  on  the  claims  of 
the  much  vaunted  man  who  scorns  everything 
but  facts,  historical  facts.  We  ought  now  to  be 
able  to  recognize  that  the  only  "  practical  man," 
in  any  conceivable  sense  known  to  economic  sci- 
ence, is  he  who,  while  seeing  general  principles, 
can  best  interpret  the  facts  around  him.  The 
position  thus  gained,  consequently,  gives  us 
added  means  of  seeing  how  economic  study  can 
be  most  intelligently  carried  on.  To  follow 
through  a  course  of  political  economy  with- 
out the  attempt  above  described,  to  think  out 


THE  STUDY  OF  POLITICAL  ECONOMY.      81 

the  principles  by  use  of  the  imagination,  and 
by  constant  application  to  familiar  facts,  would 
be  like  trying  to  climb  a  perpendicular  wall  of 
ice — the  student  will  not  catch  hold. 

Moreover,  this  kind  of  mental  exercise  is 
continually  calling  upon  one  for  the  ability  to 
see  the  pivotal  part  in  any  statement,  whether 
of  fact  or  principle.  Not  to  see  the  essential 
bearing  of  an  exposition  is  a  species  of  mental 
blindness;  but  exercise  will  gradually  give 
clearer  vision.  Nothing  is  more  common  in 
the  replies  of  untrained  students  to  questions 
than  the  happy-go-lucky  kind  of  answers  which 
bear  upon  the  general  subject,  but  are  aside 
from  the  point.  Persons  may  write  or  speak 
about  the  question,  but  do  not  answer  it ;  what 
they  say  may  be  quite  true  in  itself,  but  it 
is  irrelevant.  The  faculty  of  hitting  a  point,  or 
relevancy,  is  one,  in  my  opinion,  like  concentra- 
tion of  mind  (to  which  it  is  nearly  allied),  which 
is  largely  capable  of  cultivation  and  growth. 
And  the  discipline  of  rigorous  study  in  political 
economy  is  one  of  the  best  means  of  acquiring 
it.  In  my  experience,  there  have  been,  I  con- 
ceive, some  interesting  illustrations  of  this  idea. 


82       THE  STUDY  OF  POLITICAL  ECONOMY. 

Trained  lawyers  have,  by  heredity,  transferred 
this  faculty  of  directness  of  thought  to  their 
sons ;  and  it  has  been  possible,  sometimes,  with- 
out further  data,  to  pick  out  the  sons  of  law- 
yers from  reading  their  examination-books  in 
political  economy.  These  young  men  "  hit  the 
nail  on  the  head,"  and  make  clean  work  of  their 
answers,  without  any  mental  shuffling,  or  avoid- 
ance of  the  essential  point. 

To  make  progress  in  such  a  study  as  po- 
litical economy,  the  student  must  necessarily 
gain  exactitude  and  clearness,  both  in  writ- 
ing and  speaking.  Nothing  is  more  striking 
in  the  experience  of  an  instructor,  as  he  faces 
a  new  class,  than  the  limited  powers  of  expres- 
sion possessed  even  by  young  men  who  have 
had,  in  most  cases,  a  very  extended  course  of 
classical  training.  It  is  largely  due,  of  course, 
to  vague  and  loose  thinking.  He  who  has 
clear  ideas  can  generally  manage  to  convey 
his  meaning  in  varying  degrees  of  force,  cor- 
rectness, and  elegance.  The  necessity,  how- 
ever, of  making  clear  distinctions  between 
things,  which  at  first  seem  all  alike,  to  see 
forces  operating  where  none  were  seen  before, 


THE   STUDY  OF  POLITICAL  ECONOMY.       83 

stimulates  unused  faculties,  and  then,  as  a  natu- 
ral result,  progress  becomes  distinctly  visible. 
Men  who  at  the  beginning  expressed  them- 
selves in  halting,  inexact,  and  timid  words,  with 
a  seeming  passion  for  brevity,  will,  at  the  end 
of  the  course  in  which  they  have  been  con- 
stantly pushed  to  express  themselves,  talk  easi- 
ly and  freely  on  subjects  which  would  at 
first  have  frightened  them  by  an  appearance 
of  abstractness.  In  this  respect,  the  train- 
ing must  be  much  like  that  in  the  study  of 
metaphysics.  Under  constant  criticism  loose- 
ness of  words  and  definitions  will  disappear — 
as  clearness  of  ideas  comes  in.  In  no  other 
study  is  inexactitude  or  lack  of  precision  in 
words  or  facts  more  likely  to  stir  up  criticism 
and  ridicule  than  in  political  economy,  because 
in  no  other  study  are  we  more  concerned 
with  things  which  affect  all  the  world  in  every 
day  of  its  existence,  and  in  which  absurd  re- 
sults and  stupid  mistakes  are  more  easily  seen 
by  everybody.  The  economist  must  be  vigi- 
lant and  correct;  and  the  results  of  this  re- 
quirement are  such  as  tend  to  keep  him  as 
careful  and  exact  as  is  possible.  The  effect  of 


84       THE   STUDY  OF  POLITICAL  ECONOMY. 

training  under  such  conditions  can  not  fail  to 
be  admirable. 

Again,  the  logical  powers  are  constantly  ex- 
ercised and  stimulated.  Political  economy  will 
not,  of  course,  make  a  man  logical ;  but  a  stu- 
dent will  feel  the  need  of  logical  training  and 
accuracy  at  every  step.  It  will  often  happen 
that  the  intuition  of  the  student  will  lead  him 
to  give  a  correct  reply  to  a  question  regarding 
two  things  which  have  an  apparent  connection  ; 
but,  if  he  should  be  called  upon  to  give  the  logi- 
cal chain  of  connection  in  every  step,  he  will 
find  the  study  a  very  different  thing  than  he 
supposed.  He  will  be  taught  to  think.  If  he 
has  been  rigorously  kept  up  to  this  process 
he  will  gradually  get  a  faculty  of  reasoning 
with  some  ease  about  economic  questions,  and 
new  problems  will  be  better  handled  because 
of  his  experience  in  treating  old  ones.  Every 
student  will  be  able  to  mark  his  own  prog- 
ress, if  he  has  honestly  done  this  work  as  he 
went  along,  when  he  looks  back  over  the  course, 
and  sees  that  earlier  difficulties,  which  at  the 
time  seemed  serious,  have  now  little  power  to 
delay  him. 


THE   STUDY  OF  POLITICAL  ECONOMY.       85 

As  the  logical  part  of  the  study  naturally 
brings  its  discipline,  so  we  may  expect  that  its 
practical  side  will  stimulate  the  student  in  such 
a  way  as  will  teach  him  greater  regard  for  facts, 
and  for  the  immediate  interests  of  life.  His  eco- 
nomic intuition  will  grow,  also,  as  he  becomes 
familiar  with  the  definitions  and  fundamental 
conceptions  of  the  study.  New  practice  will 
constantly  develop  new  power,  and  new  confi- 
dence. It  goes  without  saying  that  this  can  not 
come  at  once,  and  that  the  man  who  is  unwill- 
ing to  exert  himself  can  not  get  it.  But,  al- 
though severe  logical  processes  are  demanded, 
as  in  mathematics,  yet  the  student  will  be  at- 
tracted by  the  peculiarly  human  and  practical 
element  in  the  questions  discussed,  and  he  will 
be  drawn  on  to  exert  himself  by  his  interest  in 
these  matters.  He  will  be  willing  to  do  more 
in  a  subject  whose  ends  are  intensely  practical 
than  in  one  removed  from  any  application  ^to 
his  own  personal  conditions. 

One  other  marked  result  of  the  study  of  po- 
litical economy  deserves  at  least  passing  men- 
tion. Persons  who  by  nature  are  unfitted  for 

other  kinds  of  academic  work,  and  yet  by  cus- 
8 


86       THE  STUDY  OF  POLITICAL  ECONOMY. 

torn  or  authority  have  trodden  the  beaten  edu- 
cational paths  with  a  dull  sense  of  discourage- 
ment and  incapacity,  have,  in  many  cases,  been 
awakened  to  a  hitherto  unknown  interest  in 
study  by  the  practical  and  interesting  nature  of 
the  subject.  Economic  questions  confront  them 
everywhere,  and  they  meet  with  their  discus- 
sion over  the  table,  on  the  walk,  and  in  the 
newspapers.  It,  consequently,  stimulates  even 
a  sluggish  disposition  to  find  that  he  can  know 
something  valuable  about  such  practical  matters 
of  every-day  importance.  Livy  or  Thucydides 
may  pall  on  his  incapacity,  but  his  curiosity 
may  be  piqued  by  having  the  functions  of 
money  explained  to  him.  The  purchasing 
power  of  his  yearly  allowance  is  something 
which  comes  home  even  to  him.  As  enlarging 
the  field  for  willing  mental  activity,  and  giving 
new  and  interesting  objects  for  intellectual  ef- 
fort, political  economy  forms  one  of  the  most 
effective  factors  in  the  movement  which  in 
these  latter  days  is  liberalizing  our  courses  of 
study,  and  is  freeing  us  slowly  from  the  cramped 
tyranny  of  a  traditional  training,  still  demanded, 
forsooth,  because  it  once  seemed  good  to  the 


THE   STUDY  OF  POLITICAL  ECONOMY.       gy 

schoolmen.  Willing,  enthusiastic  study,  since 
it  interests  and  fits  the  faculties,  is  a  better 
thing-  for  discipline  than  the  serfdom  of  drudg- 
ery in  a  subject  which  excites  no  spontaneous 
response  and  stirs  an  unwilling  effort.  And 
this  is  true,  also,  without  any  thought  of  under- 
valuing other  branches  of  study.  We  must  all 
admit  that  some  minds  are  better  fitted  for  one 
thing  than  for  another,  and  that  we  can  not  do 
all  things  equally  well.  There  is,  therefore,  a 
place  for  different  studies  so  long  as  human  abil- 
ities remain  of  a  varied  kind,  and  room  should 
not  be  denied  to  any  branch  of  learning  which, 
apart  from  its  "  usefulness,"  is  effective  for  men- 
tal discipline. 

A  warning,  however,  should  be  given  at  the 
outset  which  may  save  later  disappointment  to 
some  persons.  No  one  would  think  of  becom- 
ing an  accomplished  chemist  or  geologist  in  one 
course  pursued  for  one  year  ;  but  many  persons 
conceive  that  they  can  easily  know  all  of  politi- 
cal economy  that  is  necessary  for  a  sound  judg- 
ment on  current  questions  in  a  less  time  than 
that.  It  is  true  that  they  can  read  over  the 
statement  of  principles  in  a  less  time,  but  they 


88       THE   STUDY  OF  POLITICAL  ECONOMY. 

can  not  become  economists  so  easily.  To  have 
been  trained  until  these  principles  become  as 
familiar  as  the  alphabet  requires  time — time  not 
merely  for  the  intellectual  efforts  of  applying 
the  principles,  but  time  for  the  mind  to  mature 
under  the  exertion  and  to  digest  its  food  slow- 
ly ;  since  only  by  growth  and  experience  can 
there  come  any  development  of  the  economic 
intuition  and  a  power  to  call  readily  upon  any 
part  of  one's  acquisitions  for  instant  use  at  any 
moment.  This  warning  is  not  to  be  understood 
as  deterring  any  one  from  an  attempt  to  master 
the  elements  of  political  economy.  A  person 
of  ordinary  parts  can  by  industry  obtain  an 
amount  of  knowledge  which  will  not  only  be 
valuable  to  him  as  a  citizen,  and  save  him  from 
errors,  but  it  will  give  him  discipline  in  the  pro- 
portion of  his  application  and  energy.  An  ele- 
mentary course  will  serve  a  distinct  purpose  as 
part  of  a  liberal  education  for  every  citizen,  but 
he  will  not  become  an  economist  "  teres  atque 
rotundus"  at  once.  A  brief  course  in  chemis- 
try may  not  enable  the  student  to  contribute 
immediately  to  a  new  theory  of  heat,  but  it  may 
give  him  a  highly  useful  knowledge  of  the  chem- 


THE  STUDY  OF  POLITICAL  ECONOMY.       89 

istry  of  every-day  things.  We  must  not,  there- 
fore, expect  more  from  a  short  study  of  po- 
litical economy  than  we  do  from  the  same  exer- 
tion in  other  serious  studies. 


CHAPTER  IV. 

THE     RELATIONS     OF     POLITICAL     ECONOMY     TO 
THE  LAW,   THE   MINISTRY,  AND  JOURNALISM. 

POLITICAL  economy  holds  a  very  close  con- 
nection with  THE  LAW  on  different  grounds. 

In  the  first  place,  the  disciplinary  power  of 
the  study  is  very  much  that  which  is  gained 
in  the  study  and  pursuit  of  the  law.  As  has 
been  already  explained,  the  student  of  econo- 
mies is  chiefly  concerned  in  getting  a  firmly- 
rooted  understanding  of  principles,  which  he  is 
then  constantly  engaged  in  applying  to  the 
phenomena  around  him.  Or,  struck  by  some 
new  or  interesting  fact,  he  sets  himself  to  find 
the  causes  of  the  effects  he  has  observed.  In 
thus  applying  general  principles  to  explain 
special  facts,  the  student  of  political  economy 
is  doing  almost  exactly  that  which  the  student 
of  law  does,  when  he  applies  legal  principles 
to  particular  cases,  or  when  he  is  considering 


THE  STUDY  OF  POLITICAL  ECONOMY.       9I 

whether  the  interpretation  of  the  law  in  a  de- 
cision of  the  courts  applies  also  to  the  special 
case  he  has  in  hand.  The  modern  theory  of 
legal  teaching  no  longer  recognizes  the  wisdom 
of  simply  filling  the  mind  with  statements  of 
what  the  law  now  is,  but  aims  to  force  the 
student,  under  oversight,  to  discover  the  prin- 
ciple running  through  multitudes  of  cases  al- 
ready decided,  or  constantly  to  apply  principles 
to  given  facts.  If  this  be  a  correct  statement 
of  methods  of  teaching  in  the  law,  it  will  be 
seen  at  once  that  the  student  goes  through  very 
much  the  same  mental  operations  as  in  the 
study  of  political  economy.  There  is  in  fact 
a  striking  similarity  between  the  position  of 
the  practicing  lawyer  and  the  economist;  the 
lawyer  is  faced  with  a  statement  of  facts  by  his 
client,  to  which,  after  he  has  sifted  their  accu- 
racy, he  tries  to  discover  what  legal  principles 
apply ;  or  the  court,  after  ascertaining  the  truth 
of  the  averments  on  either  side,  then  considers 
the  applicability  of  certain  general  principles  of 
law  to  them.  The  economist  in  like  manner  is 
brought  to  notice,  for  example,  some  practical 
phenomena  of  banking,  or  prices ;  then  he  tests 


92        THE  STUDY  OF  POLITICAL  ECONOMY. 

the  accuracy  of  the  facts ;  and  finally  sets  him- 
self to  discover  what  economic  principles 
explain  the  observed  statistics.  The  mental 
attitude  of  the  student  is  thus  almost  exactly 
the  same  in  the  two  cases.  There  could,  there- 
fore— looking  at  the  matter  entirely  from  the 
disciplinary  point  of  view  —  scarcely  be  any 
kind  of  study  which  would  better  train  a  man 
for  the  mental  processes  of  a  lawyer's  work 
than  political  economy. 

For  another  reason  lawyers  have  a  neces- 
sary interest  in  our  study.  Those  who  follow 
the  law  are,  in  this  country,  most  likely  to  be 
chosen  to  make  the  law  in  legislative  assem- 
blies. Upon  them  will  hang  heavy  responsibili- 
ties, apart  from  questions  of  law  and  adminis- 
tration;  for  they  must  represent  the  economic 
interests  of  the  country  as  well.  From  their 
numbers,  also,  are  generally  recruited  the  active 
campaign  speakers  in  our  election  contests ;  and 
it  is  becoming  in  them  to  study  with  care  that 
which  they  expect  to  declare  to  the  people  in 
rhetorical  sentences  from  the  platform.  Po- 
litical science,  which  includes  legal  and  consti- 
tutional history,  international  law,  ethics,  the 


THE   STUDY  OF  POLITICAL  ECONOMY.       93 

study  of  government,  and  political  economy,  is 
a  field  of  large  importance  in  a  land  of  popular 
government,  and  the  legislator  ought  to  be 
conversant,  more  or  less  intimately,  with  all  its 
branches — and  especially  with  political  econo- 
my. This  reason  for  the  study  of  economics 
by  the  legal  profession  is  the  material  one  of 
"  usefulness,"  in  the  same  way  that  a  knowledge 
of  guns  is  necessary  for  an  artillery  officer. 

Legal  principles,  moreover,  are  often  based 
on  economic  grounds,  and  their  force  is  to  be 
gauged  by  their  economic  importance.  Laws 
of  bargain  and  sale  are  of  this  class ;  so,  too, 
such  as  concern  bills  of  exchange,  and  mercan- 
tile operations.  Parts  of  the  law  like  these 
stand  in  marked  contrast  to  what  is  purely 
legal  and  formal,  as,  for  example,  the  affixing 
of  a  stamp  to  a  deed  or  mortgage.  For  the 
interpretation  and  discussion  of  the  former 
principles,  it  is  difficult  to  see  how  clearness 
can  be  obtained  without  an  adequate  under- 
standing of  the  underlying  principles  of  politi- 
cal economy.  This  is  a  different  thing,  be  it 
noted,  from  the  need  of  physics  or  chemistry 
by  the  lawyer,  in  cases  which  hinge  on  a 


94       THE   STUDY  OF  POLITICAL  ECONOMY. 

knowledge  of  these  subjects.  A  case,  the  facts 
of  which  require  a  more  or  less  profound  study 
of  physics  or  chemistry  to  understand  them,  is 
settled  by  the  application  of  legal  principles, 
covering  not  this  one  case,  but  any  case  of  a 
similar  kind ;  and  it  is  the  insight  into  these 
principles  affecting  cases  in  general,  and  not 
the  facts  of  any  one  special  case,  of  which  I 
am  speaking. 

The  relation  of  political  economy  to  THE 
MINISTRY  is  of  an  entirely  different  nature.  To 
the  ministry  are  relegated,  rightly  or  wrongly, 
in  a  great  degree,  questions  of  ethics.  It  is  true 
that  students  of  ethics  exist  outside  of  the  min- 
istry, but  theirs  is  the  one  profession  which  is 
expected  to  see  that  some  kind  of  ethics  is  put 
into  practice  by  the  individual. 

At  the  outset,  we  must  learn  that  practical 
ethics  begins  where  political  economy  leaves  off. 
It  is  not  desirable  here  to  discuss  whether  or 
not  such  a  branch  of  science  exists  as  sociology; 
but  there  is  certainly  a  growing  feeling  in  favor 
of  confining  economics  strictly  to  questions  of 
wealth,  as  a  means  of  reaching  as  exact  con- 


THE  STUDY  OF  POLITICAL  ECONOMY.       95 

elusions  as  possible  by  a  limitation  of  the  field 
of  inquiry.  This  is  the  only  legitimate  sphere 
of  our  study.  When  the  economist  has  made 
clear  that  given  social  regulations  have  certain 
material  effects  for  good  or  for  evil  on  the  wel- 
fare of  any  class  in  the  community,  then  it  is  in 
order  for  others  to  take  up  the  matter  where 
political  economy  left  it,  and  set  themselves  to 
discover  the  practical  means  by  which  mind  and 
character  may  be  acted  upon,  so  as  to  bring 
about  the  good  and  avoid  the  evil  results  which 
political  economy  has  shown  must  follow  from 
stated  conditions.  This  practical  ethical  work 
does  not  fall  within  the  proper  province  of  the 
economist;  but  if — owing  to  the  fact  that  eco- 
nomic studies  are  as  yet  in  their  infancy,  and  that 
branches  of  thought  closely  dependent  on  politi- 
cal economy  are  supposed  only  to  be  known  by 
economists — popular  opinion  forces  the  econo- 
mist also  to  perform  the  function  of  a  teacher 
of  ethics,  or  of  a  social  philosopher,  it  should 
be  kept  distinctly  in  mind  that  in  this  case 
he  has  stepped  over  the  boundaries  of  his  own 
science,  and  is  for  the  time  being  within  the 
limits  of  another — although  an  allied — study. 


96       TYTE   STUDY  OF  POLITICAL  ECONOMY. 

It  is  true,  of  course,  that  the  same  man 
might  be  fitted  to  be  both  an  economist  and 
an  ethical  teacher ;  and  this  was  the  role  adopt- 
ed by  both  Adam  Smith  and  John  Stuart  Mill. 
But  still  the  fact  remains  that  the  whole  field 
of  political  economy  is  much  more  vast  than  is 
usually  supposed.  The  field  is,  in  fact,  so  great 
that  it  is  absurd  to  suppose  that  one  man  can 
cover  it  all  in  a  lifetime.  In  but  one  single 
branch,  that  of  money,  as  Professor  Jevons  says, 
no  economist  has  ever  pretended  to  have  read 
all  the  literature.  In  short,  one  might  properly 
confine  himself,  after  general  training,  to  the 
sole  study  of  currency  and  banking  all  his  life. 
The  reason  why  the  teacher  can  not  do  it  is 
plain :  it  is  only  within  ten  or  fifteen  years  that 
political  economy  has  been  allowed  a  real  foot- 
hold in  our  college  curriculum ;  and,  if  he  is  not 
even  yet  obliged  to  give  tuition  also  in  history 
and  moral  philosophy,  the  instructor  is,  at  least, 
expected  to  give  a  complete  knowledge  of  po- 
litical economy  to  a  class  in  three  or  six  months, 
and  add  the  discussion  of  ethics,  in  its  proper 
relation  to  economics,  in,  perhaps,  another 
month  or  two!  As  yet  the  necessity  for  eco- 


THE   STUDY  OF  POLITICAL  ECONOMY. 


97 


nomic  teaching  has  been  so  little  recognized 
that  few  chairs  exist  for  instruction  in  politi- 
cal economy  alone ;  while  a  proper  subdivision 
of  the  work — such  as  exists  in  the  university 
departments  of  Greek,  Chemistry,  or  Natural 
History — would  require  several  chairs,  one  for 
each  particular  part  of  the  study.  Division  of 
labor  has  not  yet  been  applied  to  economic 
teaching.  But,  at  least,  we  can  demand  that  the 
economist  should  not  be  required  to  fill  the 
function  of  an  ethical  teacher  also.  He  is  inevit- 
ably led  to  it,  but  it  is  not  in  the  rdle  of  an  econo- 
mist that  he  should  enter  on  the  new  field. 

It  seems,  therefore,  necessary  to  make  this 
distinction  between  the  work  of  the  economist 
and  the  ethical  teacher,  if  for  no  other  reason 
than  that,  to  do  one  part  of  his  work  respecta- 
bly well,  he  should  confine  himself  to  that  alone. 
In  fact,  many  high-sounding  programmes  exist, 
ostensibly  covering  history,  statistics,  econom- 
ics, and  social  science,  which  must  some  day 
be  remodeled  more  in  accordance  with  actual 
achievements  in  these  fields  and  the  limits  of 
human  life  of  the  few  men  who  are  granted  to 
carry  them  on. 
9 


98       THE   STUDY  OF  POLITICAL  ECONOMY. 

It  may  now,'  perhaps,  be  understood  what 
was  meant  by  saying  that  ethics  begins  where 
political  economy  leaves  off.  An  illustration 
will,  however,  make  this  meaning  more  clear. 
It  is  an  accepted  doctrine  of  political  economy 
that  capital  is  created  by  saving;  and  it  is 
shown  still  further  that  saving  depends  upon 
the  "  strength  of  the  effective  desire  to  save  "  in 
a  community.  When  the  process  of  saving  is 
still  further  analyzed,  it  is  found  that  saving 
means  a  willingness  to  abstain  from  a  present 
use  of  wealth  in  consideration  of  some  future, 
and  generally  distant,  reward.  For  example,  a 
slave  has  painfully  saved  a  little  money  at  a 
time,  instead  of  using  it  for  clothing  or  amuse- 
ments, in  order  to  purchase  his  freedom,  even 
though  he  does  not  accomplish  it  for  many 
years.  Political  economy  does  not  concern  it- 
self with  questions  of  political  freedom,  for 
which  the  slave  has  a  longing.  It  shows  that 
saving  increases  in  proportion  to  the  ability  of 
a  person — no  matter  for  what  underlying  cause 
— to  bring  the  future  reward  so  strongly  before 
the  mind  that  it  overcomes  the  pressing,  eager, 
tumultuous  demands  of  the  present  gratifica- 


THE  STUDY  OF  POLITICAL  ECONOMY.       99 

tions ;  or,  in  other  words,  in  proportion  to  the 
ability  to  grasp  the  unseen  as  compared  with  the 
seen.  A  familiar  illustration  of  this  has  been 
given  from  the  experience  of  the  Jesuits  with 
the  natives  of  Paraguay,  over  whom  they  ac- 
quired a  complete  ascendency,  and  easily  man- 
aged to  get  from  them  labor  of  the  most  fa- 
tiguing kind ;  but  at  evening,  when  hungry,  the 
seen  was  stronger  than  the  unseen,  and  they  use- 
lessly killed  their  oxen  for  food,  regardless  of 
the  coming  morrow.  In  this  way  political  econ- 
omy has  explained  the  motives  which  induce 
men  to  save,  and  has  shown  why  the  induce- 
ment is  wanting.  And  here  the  duty  of  the 
economist  ceases.  So  that,  in  the  case  of  the 
slave,  political  economy  does  not  set  itself  to 
explain  the  force  which  love  of  freedom  exer- 
cises over  the  human  mind,  but  simply  affirms 
that,  if  such  a  force  exists,  strong  enough  to 
overcome  a  present  desire  for  gratification,  it 
will  result  in  an  increase  of  capital. 

But  the  eager,  philanthropic  world  at  once 
asks,  as  it  considers  the  condition  of  the  worst 
of  the  laboring  classes,  among  whom  there  is  no 
saving,  or  thought  of  the  future,  How  can  we  in- 


ioo     THE  STUDY  OF  POLITICAL  ECONOMY. 

duce  men  to  save  ?  For  an  answer  we  must  not 
go  to  the  economist,  but  to  the  student  of  ethics. 
He  who  has  made  a  study  of  the  mind  and 
character,  and  knows  best  their  operations,  and 
the  springs  which  lead  to  action,  must  set  him- 
self to  find  a  solution  of  the  problem — whether 
it  shall  be  in  education,  in  Christian  teaching, 
or  in  some  form  of  co-operation  and  industrial 
partnership.  How  the  ideals  of  the  laboring 
classes  may  be  raised  is  wholly  an  ethical  and 
not  an  economic  inquiry.  There  is  nothing  to 
prevent  an  economist  from  joining  in  the 
search ;  but  he  is  then  wearing  the  uniform  of 
another  sovereign.  Yet,  of  course,  it  is  evident 
that  the  ethical  student  can  not  know  where  to 
direct  his  energies  with  effect  unless  he  be  in- 
formed and  guided  by  the  work  of  the  econo- 
mist. 

There  is,  then,  a  very  important  connection 
existing  between  political  economy  and  the 
study  of  practical  ethics.  And,  consequently, 
to  no  class  in  the  community  does  the  demand 
for  a  knowledge  of  economic  principles,  and  for 
a  practical  realization  of  the  means  by  which 
the  masses  of  men  should  be  touched,  appeal 


THE   STUDY  OF  POLITICAL  ECONOMY.     IOI 

with  more  justice  and  force  than  to  the  edu- 
cated ministry  of  the  country.  Just  so  far  as 
they  propose  to  treat  social  questions  in  their 
work  of  Christian  teaching,  or  in  effective  pas- 
toral work  among  the  poor,  must  they  learn 
what  channels  political  economy  has  shown  to 
be  open  to  their  leavening  efforts.  An  illustra- 
tion of  this  position  may  be  found  in  the  general 
question  of  charities.  Political  economy  has 
earnestly  taught  that  reliance  upon  individual 
self-help  is  more  conducive  to  production  than  a 
necessarily  enervating  dependence  on  outside 
help,  whether  it  be  on  the  State  or  on  the  local 
government.  It  has  pointed  out  the  slackening 
of  restraints  on  population  whenever  the  State 
aided  in  wages,  or  in  alms-giving.  Now,  these 
principles,  so  briefly  hinted  at,  have  been  grossly 
violated  by  those  whose  good  intentions  have 
proved  greater  than  their  wisdom,  and  who, 
under  the  name  of  charity,  have  established  in- 
stitutions for  destroying  the  character  and  self- 
help  of  the  poor.  While,  on  the  other  hand, 
by  a  movement  in  direct  obedience  to  economic 
principles,  the  most  signal  triumph  of  modern 
philanthropy  in  charitable  work  has  been  lately 


I02     THE   STUDY  OF  POLITICAL  ECONOMY. 

accomplished  by  the  system  of  the  "Associated 
Charities,"  the  object  of  which  has  been  to  as- 
sist misfortune  through  regular  visits  from  per- 
sons of  discretion,  who  can  supply  the  lack  of 
prudence  among  the  unfortunate,  but  who  do 
not  give  money ;  who  find  avenues  for  unused 
or  dormant  powers,  teaching  the  poor  what 
practical  labor  they  ought  to  undertake ;  and 
who,  by  showing  how  individual  effort  may  be 
exercised,  remove  the  existing  premiums  on 
vagrancy,  and  cease  to  emasculate  exertion  by 
gifts  rendered  for  no  consideration. 

There  exists  between  political  economy  and 
Christianity  at  once  a  friendly  and  a  close  con- 
nection ;  and  one  is  not  at  variance  with  the 
other.  It  has  been  the  fashion  in  the  past  to 
save  thinking  by  applying  to  political  economy 
the  catch-word  "  dismal  science,"  because  of  its 
teaching  on  the  question  of  restraints  upon  the 
increase  of  population  among  those  classes 
whose  productive  power  did  not  increase  cor- 
respondingly with  their  numbers.  If  political 
economy  pointed  out  that  an  increase  of  num- 
bers led  to  misery  and  poverty  in  certain  con- 
ditions, then  surely  it  were  practical  Christian 


THE   STUDY  OF  POLITICAL  ECONOMY.     IO3 

teaching  to  explain  this,  and  strive  to  prevent 
this  misery  and  poverty.  In  fact,  the  investi- 
gator and  first  expounder  of  the  law  of  popula- 
tion was  a  country  clergyman  in  England,  Mr. 
Malthus.  In  teaching  the  universal  rules  of 
Christian  precepts,  the  minister  who  expects  to 
be  of  most  good  to  the  poor  about  him  must 
learn  in  what  practical  channels  these  precepts 
lead  him,  or  he  will  be  disheartened  by  dismal 
failure.  But  as  a  Christian  teacher,  in  enforc- 
ing the  value  of  the  unseen  over  the  seen  he  is 
laying  the  foundation  for  the  best  practical  po- 
litical economy — in  fact,  the  essence  of  civiliza- 
tion. Such  teaching  will  increase  capital  and 
check  undue  increase  of  population. 

Thus,  without  going  far,  we  are  able  to  see 
the  laws  of  Christian  ethics  working  through 
the  medium  of  practical  economic  forms.  The 
relation  of  economic  work  to  the  life  of  the  min- 
istry might  be  further  illustrated,  but  perhaps 
enough  has  been  said  to  outline  my  understand- 
ing of  it.  The  student  of  ethics  stands  in  the 
very  gratifying  position  of  supplementing  po- 
litical economy  by  suggesting  practical  means 
for  influencing  human  nature  to  better  ends. 


I04     THE  STUDY  OF  POLITICAL  ECONOMY. 

Political  economy  rests  content  with  trying  to 
explain  the  relations  between  the  various  phe- 
nomena of  wealth ;  while  the  ethical  reformer 
works  to  change  what  is  wrong.  Political 
economy  explains ;  it  does  not  judge  or  reform. 

JOURNALISM,  although  a  young  profession,  is 
a  growing  one,  and  its  influence  upon  public 
opinion  is  still  greater  than  that  of  the  minis- 
try. The  newspaper  has  created  a  new  avo- 
cation, in  which  an  editor  is  obliged  to  deal 
with  all  the  questions  which  agitate  the  human 
mind.  Ideally  speaking,  the  journalist  ought 
to  have  read  well  in  every  subject,  especially 
in  home  and  foreign  politics,  law,  economics, 
science,  ethics,  and  literature.  In  practice,  a 
division  of  labor  inevitably  takes  place.  But, 
even  then,  some  subjects  are  oftenest  before 
the  public  for  discussion,  and  this  consequently 
increases  the  importance  of  one  part  of  the 
training  for  a  journalist  over  another.  As  has 
been  already  pointed  out,  the  largest  propor- 
tion of  questions  before  Congress  are  in  their 
nature  economic ;  and  to  these  are  to  be  added 
the  questions  of  state  and  local  taxation,  and 


THE  STUDY  OF  POLITICAL  ECONOMY.     Io$ 

kindred  measures,  certain  to  be  discussed  in 
every  newspaper  which  is  read.  Just  here  is 
the  seriousness  of  the  situation.  All  of  these 
complex  economic  questions  are  sure  to  be 
discussed — irrespective  of  the  knowledge  or 
preparation  of  the  writer.  In  other  words, 
each  newspaper  is  expected  by  popular  opin- 
ion to  declare  itself  with  proper  force  and  dog- 
matism on  every  subject  before  the  public. 
The  result  of  this  is,  that  there  is  certain  to  be 
some  diffusion  of  ideas  on  economic  questions, 
either  good  or  bad,  throughout  the  whole  land. 
No  matter  what  we  think  about  it,  there  is  sure 
to  be  some  teaching  of  one  kind  or  another. 
The  important  point  is,  can  this  teaching  be 
made  good  ?  When  we  consider  the  extraordi- 
nary power  of  the  press  in  moulding  public 
opinion,  the  responsibility  resting  on  journalists 
to  give  the  right  economic  teaching  is  almost 
deterrent  in  its  seriousness.  And  since  it  is 
absolutely  certain  that  there  will  be  economic 
ideas  of  some  kind  in  the  minds  of  the  public, 
it  is  evident  that  we  can  make  these  ideas  good 
ones,  only  by  working  at  the  purveyors  of  such 
writing  in  the  journals  of  the  land. 


I06     THE  STUDY  OF  POLITICAL  ECONOMY. 

The  relation  of  political  economy  to  journal- 
ism is  thus  seen  to  be  a  very  different  one 
from  that  to  the  ministry.  The  latter  carry 
out  by  ethical  methods  changes  suggested  by 
the  economist  as  possible;  while  the  former 
are  economic  teachers.  In  short,  careful  pre- 
paration in  political  economy  is  as  necessary 
for  an  influential  writer  for  the  press  as  it  is 
for  the  instructor  of  political  economy  in  the 
schools  and  colleges.  The  day,  we  hope,  is 
fast  passing  when  a  teacher  of  economics  can 
face  a  class,  without  previous  training  and 
study ;  and  it  is  quite  as  absurd  to  place  a  man 
in  an  editor's  chair  who  is  distinctly  unqualified 
for  his  position  in  respect  of  an  adequate  power 
to  discuss  economic  questions. 

It  would  seem  desirable,  after  a  general 
course  which  gives  a  coup  cTceil  of  the  whole 
field,  that  the  journalist  should,  if  his  time  is 
somewhat  limited,  give  himself  to  studying  the 
present  economic  questions  on  which  political 
issues  are  turning,  or  which  are  uppermost  in 
men's  minds.  Such  a  course  of  reading  must 
necessarily  change  with  the  movement  of  events, 
but  a  few  hints  as  to  useful  books  might  not 


THE  STUDY  OF  POLITICAL  ECONOMY.     Ioj 

be -out  of  place.  The  subjects  which  are  now 
before  us  have  been  already  mentioned  (Chap- 
ter I),  but,  besides  a  general  control  of  eco- 
nomic principles,  a  knowledge  of  the  following 
subjects,  at  least,  should  be  urged  as  absolutely 
necessary  for  a  journalist's  immediate  equip- 
ment: 

1.  The  History  of  American  Tariffs; 

2.  The  National  Banking  System  ; 

3.  The  Theory  and  History  of  Bimetallism  ; 

4.  American  Shipping ;  and 

5.  Taxation. 

The  question  might  be  naturally  asked. 
How  can  this  preparation  be  obtained?  To 
those  who  have  the  means  of  acquiring  a  uni- 
versity education  the  answer  is  evident.  An- 
other class,  composed  of  those  hard-working, 
self-educated  men,  who  are  often  doing  excel- 
lent work  without  the  prestige  of  a  college 
training,  can  now  enter  the  university  courses 
as  special  students,  pursuing  only  particular 
studies,  of  their  own  choosing.  But,  for  the 
large  class  of  men  who  can  not  now  leave  their 


IOS     THE  STUDY  OF  POLITICAL  ECONOMY. 

stations,  and  yet  would  gladly  improve  their 
daily  opportunities  for  study,  something  can 
be  done  to  make  their  work  easier  through 
the  means  of  bibliographies  issued  by  libraries 
and  specialists.  These  should  be  graded  :  some 
lists  of  books  should  be  adapted  to  a  class  not 
accustomed  to  technical  work ;  and  then  a  com- 
plete and  minute  bibliography  for  specialists 
should  be  added.  The  scholars  and  universi- 
ties owe  a  debt  to  the  community  which  has 
supplied  them  with  the  endowments  and  re- 
sources for  carrying  on  instruction,  and  by  the 
publication  of  helpful  bibliographies  can  well 
afford  to  render  the  great  accumulations  of 
books,  and  the  skill  which  they  have  gained 
through  special  studies,  useful  to  the  less  for- 
tunate. Such  lists  are  the  campaign  maps  of 
any  subject,  which,  in  these  days  of  many 
books,  is  obscured  merely  by  the  multiplicity 
of  publications. 

As  a  practical  illustration  of  the  feasible- 
ness of  this  plan,  it  is  easy  to  show  what  can 
be  done  in  the  above-mentioned  subjects  which 
were  considered  necessary  to  a  journalist's  effi- 
ciency. 


THE  STUDY  OF  POLITICAL  ECONOMY.     log 

1.  The  History  of  American  Tariffs. 

A  bibliography  of  a  general  character  has 
been  already  made  *  under  the  following  heads : 

a.  General  works. 

b.  Earlier  Periods. 

c.  Noteworthy  Documents. 

d.  Pauper-Labor  Argument. 

e:  View  of  Early  Manufactures. 
/.  Later  View  of  Manufactures. 
g.  Present  Tariff  (1884). 

2.  The  National  Banking  System. 

Inasmuch  as,  to  my  knowledge,  no  bibliog- 
raphy exists  on  this  topic,  I  shall  make  some 
suggestions  as  to  books. 

"Extracts  from  the  Laws  of  the  United 
States  relating  to  Currency  and  Finance  "  (Se- 
ver, Cambridge)  gives  the  National  Bank  Act 
in  connection  with  other  financial  legislation  in 
a  brief  form. 

"  The  National  Bank  Act "  is  published  sepa- 
rately by  the  Government  (and  also  by  the  Ho- 
mans  Publishing  Co.,  251  Broadway,  New  York). 

*  In  an   abridgment  of  Mill's  "  Political  Economy,"  by  the 
author  (D.  Appleton  &  Co.,  1884,  second  ed.  1885),  pp.  631-633. 
10 


IIO     THE  STUDY  OF  POLITICAL  ECONOMY. 

"  Reports  of  the  Comptroller  of  the  Curren- 
cy," are  published  annually  in  December,  by  the 
Government  in  separate  form,  and  also  in  the 
Finance  Reports  with  other  documents.  The 
Comptroller  is  the  officer  who  supervises  the  na- 
tional banks,  and  makes  his  reports  to  the  Sec- 
retary of  the  Treasury.  They  contain  official 
information  as  to  banking  statistics,  and  all 
questions  affecting  the  condition  of  the  banks. 
They  do  not  begin,  of  course,  before  1864. 
Those  under  the  tenure  of  John  Jay  Knox  are 
especially  good. 

"  The  Decisions  of  the  United  States 
Courts  "  on  the  Banking  Laws  can  be  found 
analyzed  in  the  Comptroller's  Reports  (e.  g.,  in 
that  of  1884,  p.  77). 

"  Finance  Report  of  1861  "  gives  the  first 
recommendations  to  Congress,  by  Secretary 
Chase,  for  the  adoption  of  the  system.  See 
also  his  Report  for  1862. 

"Comptroller's  Report  of  1875"  contains  a 
history  and  explanation  of  the  national  banking 
scheme.  See  also  Report  for  1876. 

Bowen's  "  American  Political  Economy," 
chap,  xvi,  discusses  the  value  of  the  plan. 


THE  STUDY  OF  POLITICAL  ECONOMY,     m 

"The  Advantages  of  the  National  Bank 
System  of  the  United  States  now  in  Force/' 
in  the  "  Banker's  Magazine,"  March,  1868,  by 
George  Walker.  Also  published  separately. 

Some  general  treatment  in  modest  form 
may  be  found  in  M.  L.  Scudder's  "  National 
Banking:  a  Discussion  of  the  Merits  of  the 
Present  System"  (1879);  and  H.  W.  Richard- 
son's "National  Banks"  (New  York,  1880). 

As  to  the  machinery  for  the  retirement  of 
notes,  see  a  discussion  in  the  "  Atlantic  Month- 
ly," February,  1882,  "The  Refunding  Bill  of 
1881." 

3.   The  Theory  and  History  of  Bimetallism. 
A  bibliography  *  has  already  been  compiled 
under  the  following  heads: 

a.  Standards  of  Value. 

b.  Bimetallic  Theory. 

c.  Gresham's  Law. 

d.  Compensatory  Effect  of  Two  Standards. 

e.  Effect  of  Law  on  the  Relative  Values  of 
Gold  and  Silver. 

*  In  the  abridgment  of  Mill's  "  Political  Economy,"  already 
referred  to,  pp.  633-635. 


II2     THE  STUDY  OF  POLITICAL  ECONOMY. 

f.  Production,  and  Relative  Values,  of  Gold 
and  Silver. 

g.  Demonetization  of  Silver  by  Germany. 
//.  Latin  Union. 

i.  Flow  of  Silver  to  the  East. 
j.  Depreciation  of  Silver. 
k.  Appreciation  of  Gold. 
/.  Bimetallism  in  the  United  States. 

4.  American  Shipping. 

A  bibliography  *  has  likewise  been  prepared 
on  the  following  topics : 

a.  English  Navigation  Acts. 

b.  Navigation  Laws  of  the  United  States. 

c.  Growth  of  American  Shipping. 

d.  Steam  and  Iron  Ships. 

e.  Decline  of  American  Shipping. 
/.  Burdens  on  Ship-owners. 

5.  Taxation. 

A  few  suggestions  as  to  sources  of  informa- 
tion will  aid  an  energetic  student  to  get  a  gen- 
eral view  of  the  subject. 

E.  De   Parieu's  "  Traite*    des  impots  consi- 

*  Abridgment  of  Mill's  "  Political  Economy,"  pp.  635,  636. 


THE   STUDY  OF  POLITICAL  ECONOMY.     II3 

deres  sous  le  rapport  historique,  economique,  et 
politique  en  France  et  a  1'etranger "  (second 
edition,  1867),  4  vols.  This  gives  a  comparison 
of  the  system  of  taxation  in  various  countries. 

Alexander  Johnstone  Wilson's  "  The  Na- 
tional Debts,  Taxes,  and  Rates."  (London, 
1882,  in  "  Citizens  Series.")  This  furnishes  a 
view  of  the  whole  English  system  of  taxation 
in  a  small  compass. 

R.  Dudley  Baxter's  "  The  Taxation  of  the 
United  Kingdom"  (1869)  offers  explanations  of 
the  incidence  of  taxation  on  the  various  classes 
in  the  community.  See  also  the  same  writer's 
"National  Debts "  (1871). 

"  Report  of  the  Commissioners  appointed  to 
revise  the  Laws  for  the  Assessment  and  Collec- 
tion of  Taxes,"  to  the  New  York  Legislature 
(Albany,  1875),  by  David  A.  Wells,  Edwin 
Dodge,  George  W.  Cuyler. 

Second  Report,  by  the  same  authors,  with 
a  code  of  laws  relating  to  Assessment  and 
Taxation  (1872).  These  are  two  notable  re- 
ports. 

"Report  of  the  Commissioners  appointed 
to  inquire  into  the  Expediency  of  revising  and 


U4     THE   STUDY  OF  POLITICAL  ECONOMY. 

amending  the  Laws  relating  to  Taxation  and 
Exemption  therefrom."  Made  to  the  Massa- 
chusetts Lower  House  (Doc.  No.  15),  January 

1875. 

William  Minot's  " Taxation"  (1881)  discusses 
the  wrongs  of  double  taxation.  See  also  "  So- 
cial Science  Journal,"  January,  1878,  for  a  bet- 
ter treatment  of  the  same  subject  by  the  same 
writer. 


CHAPTER  V. 

METHODS  OF  TEACHING  POLITICAL  ECONOMY. 

A  NATION  is  sometimes  so  bitterly  taught  by 
sad  experience  in  financial  errors — as  was  the 
case  with  France  in  John  Law's  time,  and  again 
in  the  issue  of  paper  assignats  during  the  Revo- 
lution— that,  on  the  principle  of  the  "  burned 
child,"  it  afterwards  finds  that  it  unconscious- 
ly keeps  to  the  right  and  avoids  the  wrong 
path.  So  that  to-day  France  is  a  country  where 
correct  conceptions  of  money  are  almost  uni- 
versal, and  whose  public  monetary  experiments 
are,  as  a  rule,  most  admirably  conducted.  In 
somewhat  the  same  way  does  the  individual 
gain  his  proper  knowledge  of  political  economy. 
Principles  must  be  seen  working  in  a  concrete 
form.  The  key  to  efficient  teaching  of  it  is  to 
connect  principles  with  actual  facts ;  and  this 
process  can  go  on  in  the  beginner's  mind  only 
through  experience.  By  experience,  I  mean 


n6     THE  STUDY  OF  POLITICAL  ECONOMY. 

the  personal  (subjective)  effort  of  each  one  to 
realize  the  working  of  the  principle  for  him- 
self in  the  facts  of  his  own  knowledge.  The 
pupil  must  be  put  in  the  way  of  assimilating 
for  himself  the  principles  of  his  subject  in  such 
a  manner  that  he  feels  their  truth  because  they 
are  apparent  in  explanation  of  concrete  things 
all  around  him.  That  this  is  the  aim  to  be 
always  kept  in  view  by  the  teacher  and  stu- 
dent has  been  made  clear,  it  is  to  be  hoped, 
by  the  previous  analysis  of  the  character  and 
discipline  of  political  economy  in  Chapters  II 
and  III.  It  is  now  my  purpose  to  make  some 
suggestions  as  to  the  practical  methods  of  teach- 
ing by  which  this  can  be  carried  into  effect. 

i.  The  relative  advantages  of  lectures  and 
recitations  for  political  economy  have  never, 
to  my  knowledge,  been  openly  discussed.  An 
experience  with  both  methods  of  teaching  leads 
me  to  think  that  the  lecture  system,  pure  and 
simple,  is  so  ineffective  that  it  ought  to  be  set 
aside  at  once  as  entirely  undesirable.  The  dis- 
ciplinary power  to  be  gained  by  the  study  is 
almost  wholly  lost  to  the  student  by  this  method 
of  teaching.  Nothing  is  so  useful  as  a  sharp 


THE   STUDY  OF  POLITICAL  ECONOMY.     II7 

struggle,  an  effort,  a  keen  discussion,  or  possi- 
bly a  failure  of  comprehension  at  the  time ; 
for  nothing  will  so  awaken  one  to  intellectual 
effort,  and  finally  result  in  the  safe  lodgment 
of  the  principle  within  one's  mind  as  an  ob- 
struction and  its  removal.  This  is  not  gained 
by  listening  to  lectures.  No  matter  how  clear 
the  exposition  of  the  principles  may  be,  no 
matter  how  fresh  and  striking  the  illustrations, 
it  still  remains  that  the  student  is  relieved  by 
the  instructor  from  carrying  on  the  mental 
processes  which  he  ought  to  conduct  for  him- 
self. In  fact,  the  clearer  the  exposition  by  the 
instructor,  the  less  is  left  to  the  student — the 
lecturer,  in  fact,  is  the  chief  gainer  by  the  sys- 
tem. Moreover,  while  listening  to  a  connect- 
ed and  logical  unfolding  of  the  principles,  the 
student  is  lulled  into  a  false  belief  that,  as  he 
understands  all  that  has  been  so  clearly  pre- 
sented to  him,  he  knows  the  subject  quite  well 
enough ;  and  the  result  is  to  send  out  a  number 
of  conceited  men  who  really  can  not  carry  on 
a  rational  economic  discussion.  They  wholly 
miss  the  discipline  which  gives  exactitude,  men- 
tal breadth,  keenness,  and  power  to  express 


n8     THE  STUDY  OF  POLITICAL  ECONOMY. 

themselves  plainly  and  to  the  point.  Then,  not 
being  forced  to  think  over  a  principle  in  its  ap- 
plication to  various  phases  of  concrete  phenom- 
ena, they  know  the  truth  only  in  connection 
with  the  illustrations  given  by  the  lecturer, 
while  they  utterly  fail  to  assimilate  the  princi- 
ples into  their  own  thinking.  The  subject  then 
becomes  to  them  a  matter  of  memory.  They 
memorize  the  general  statements  without  ever 
realizing  their  practical  side,  and  that  which  is 
memorized  for  the  day  of  examination  is  forgot- 
ten more  speedily  than  it  is  learned,  and  the 
sum  total  of  the  discipline  has  been  simply  a 
stretching  of  the  memory.  In  fact,  with  the 
average  student,  in  almost  any  subject  the  lect- 
ure system  leads  to  cramming.  At  the  best,  it 
affords  a  constant  temptation  to  put  off  that 
kind  of  mental  struggle  which  ought  to  be  car- 
ried on  by  by  the  student  himself — a  period  of 
doubts  and  questions — by  which  alone  a  clearer 
conception  of  the  subject  ultimately  emerges. 
In  fact,  without  it,  it  is  doubtful  if  the  student 
ever  gets  much,  if  any,  of  that  mental  attrition 
on  the  subject  which  is  the  most  valuable  part 
of  the  work.  An  experience  of  a  year  with 


THE   STUDY  OF  POLITICAL  ECONOMY.     II9 

lecturing  in  an  elementary  course  to  a  class  of 
two  hundred  and  fifty,  including  the  best  and 
the  poorest  men  in  the  university,  practically 
convinced  me,  when  taken  with  other  evidence, 
of  the  truth  of  the  above  position ;  for,  as  con- 
trasted with  the  work  of  similar  men  in  other 
years  under  a  different  system,  their  examina- 
tion-books were  the  most  unsatisfactory  I  had 
ever  read. 

The  usual  alternative  to  the  lecture  system 
is  the  plan  of  recitations  from  a  text -book. 
Even  the  simplest  form  of  recitations  is,  in  my 
opinion,  better  than  listening  to  lectures.  At 
the  very  least,  the  student  is  put  to  it  to  ex- 
press the  sense  in  his  own  words,  and  that, 
too,  under  the  criticism  of  the  teacher.  But 
this  plan  has  its  evident  difficulties.  If  the 
pupil  is  called  upon  for  only  that  which  is  con- 
tained in  the  book,  he  falls  into  the  habit  of 
memorizing,  and  fails  to  think  for  himself.  If 
you  give  him  the  clew,  he  can  tell  you  on  what 
part  of  the  page  the  statement  is  found,  and  he 
can  talk  in  the  language  of  the  book ;  but  he 
knows  nothing  of  the  power  of  applying  it  to 
what  he  sees.  If  the  learner  is  very  clever  and 


I20     THE   STUDY  OF  POLITICAL  ECONOMY. 

inquisitive,  he  may  do  something  for  himself, 
but  the  average  pupil  quite  misses  the  real  good 
of  such  a  course. 

2.  As  it  is  evident  that  neither  lectures  nor 
formal  recitations  in  the  old  fashion  are  satis- 
factory, we  are  inevitably  led  to  adopt  a  plan 
which  possesses  the  advantages  of  both.  Some 
text-book  is  essential  as  a  basis  for  the  instruc- 
tion.* In  it  the  pupil  should  find  an  exposition 
of  the  principles,  and  a  provocation  to  apply 
them  to  practical  things  as  he  reads.  Then  he 
should  come  to  the  class-room  as  intelligently 
familiar  with  the  principles  as  his  reading  can 
make  him.  Now  comes  the  work  of  the  in- 
structor. With  a  class  of  beginners,  it  is  sur- 

*  The  question  naturally  arises  in  the  teacher's  mind,  What 
is  the  best  text-book  ?  This,  of  course,  is  a  matter  of  individual 
experience  and  judgment,  and  competent  persons  will  differ  in 
offering  advice.  From  my  own  point  of  view,  I  should  strongly 
recommend  for  mature  students,  who  can  give  to  it  fifty  or  sixty 
hours  of  recitation,  Mill's  "Principles  of  Political  Economy." 
For  those  who  wish  a  less  severe  course,  for  a  shorter  time,  Mr. 
and  Mrs.  Marshall's  "Economies  of  Industry"  is  an  excellent 
book.  For  the  same  persons,  a  forthcoming  book  by  Professor 
Simon  Newcomb,  to  be  published  this  summer  (1885),  would  be 
admirable.  I  have  seen  the  advanced  sheets,  and  find  the  system 
of  applying  principles  to  facts  at  the  end  of  each  chapter  admira- 
bly carried  out.  For  books  to  be  consulted  by  the  teacher,  he  is 
referred  to  the  "  Library  "  list  at  the  beginning  of  this  volume. 


THE  STUDY  OF  POLITICAL  ECONOMY.     I2i 

prising  how  easy  it  is  to  show  even  to  the  best 
men  a  gap  in  their  knowledge,  or  a  misunder- 
standing of  the  principle.  Present  an  illustra- 
tion different  from  that  of  the  book,  and  ask 
them  to  explain  the  situation,  and  very  few  will 
be  able  to  respond.  The  necessity  of  seeing 
the  essential  point  in  the  facts  and  the  attempt 
to  describe  the  operation  of  the  principle  will 
effectually  rout  the  man  who  has  merely  memo- 
rized the  book,  and  teach  him  to  think  out 
the  matter  more  thoroughly  for  himself  in  the 
future.  The  teacher,  also,  will  try  to  find  out 
the  accidental  obstacles  which  in  a  young  mind 
obstruct  the  understanding  of  the  point  in  ques- 
tion. Let  the  pupil  be  asked  to  state  the  mat- 
ter, and  let  the  teacher  note  the  imperfections. 
At  the  same  time  he  can  stimulate  another  stu- 
dent by  questioning  him  as  to  one  of  these  im- 
perfections. If  a  correction  is  not  obtained  in  a 
clear  and  connected  manner  from  a  member  of 
the  class,  let  the  instructor  apply  the  Socratic 
method.  At  first  ask  a  question  which  the 
learner  readily  understands,  and  then  lead  him 
naturally  and  gradually  by  logical  steps  up  to 

the  point  wherein  he  had  failed  of_imdefstand- 
ii 


I22     THE  STUDY  OF  POLITICAL  ECONOMY. 

ing.  He  will  then  see  his  own  difficulty,  and 
at  the  same  time  he  has  had  a  little  robust  exer- 
cise for  his  mind.  If  this  is  carried  on  before 
his  fellows,  it  will  the  better  cultivate  coolness 
and  self-control  before  an  audience. 

3.  Above  all,  the  hour  should  not  be  wasted 
in  simply  rehearsing  what  has  been  read  in  the 
book.  The  student  should  go  away  from  the 
class-room  feeling  that  he  has  received  some 
new  idea,  or  some  interesting  fact  which  illus- 
trates his  subject.  The  work  of  the  class-room 
should  be  cumulative  in  its  effect  as  compared 
with  the  results  of  text-book  reading.  The 
teacher  should  in  every  way  stimulate  questions 
from  members  of  his  class,  and  urge  the  state- 
ment by  them,  either  orally  or  in  writing,  of 
their  doubts  and  difficulties.  If  there  is  some 
timidity  in  presenting  a  weakness  in  the  pres- 
ence of  a  class,  ask  a  question  of  some  more 
manly  person  of  the  number,  and  the  timid  stu- 
dent will  soon  see  that  others  are  not  much  bet- 
ter off  than  he.  In  fact,  all  will  have  difficulties 
in  understanding,  or  in  interpreting  principles, 
some  trivial,  some  serious ;  and  the  pupil  will 
become  discouraged  unless,  these  are  removed. 


THE  STUDY  OF  POLITICAL  ECONOMY.     I2$ 

When  each  one  sees  that  others  are  also  hin- 
dered by  obstacles,  there  will  be  a  greater 
freedom  in  asking  questions.  Moreover,  in  or- 
der to  keep  up  a  steady  and  regular  training, 
which  will  produce  the  best  disciplinary  results, 
let  the  questions  of  the  instructor  every  day  run 
backward  in  review,  and  especially  aim  to 
bring  out  the  connection  of  one  part  of  the  sub- 
ject with  another.  It  will  be  very  effective  if 
done  just  about  the  time  that  the  past  work  is 
growing  a  little  dim  before  the  presence  of 
newer  ideas.  In  no  subject,  perhaps,  more  than 
in  political  economy,  is  it  necessary  to  know 
the  preliminary  steps  in  order  to  understand 
the  later  work ;  so  that  the  pupil  must  be  actu- 
ally in  possession  of  principles  previously  ex- 
pounded, for  which  he  may  be  called  upon  at 
any  time.  It  is  simply  impossible  for  a  person 
to  be  absent  and  neglectful  for  a  time  in  his 
study,  and  then  come  into  the  class-room  to 
make  a  brilliant  show  on  an  intermediate  frag- 
ment of  the  subject.  He  can  be  too  easily 
exposed  as  a  humbug  to  attempt  it  a  second 
time.  Moreover,  thus  to  force  him  to  do  the 
work  as  he  goes  along  is  the  greatest  favor  one 


I24     THE  STUDY  OF  POLITICAL  ECONOMY. 

can  do  for  the  pupil ;  and  the  usual  cramming 
before  the  examination  becomes,  in  reality,  a 
general  review,  which  is  very  useful  in  bring- 
ing him  to  see  the  connection  existing  through- 
out the  whole  subject. 

4.  If  the  class  is  so  large  that  it  is  impos- 
sible for  the  instructor  to  reach  each  member 
as  often  as  he  might  wish  with  the  above  meth- 
od, there  is  one  device  which  is  more  or  less 
useful.  At  the  beginning  of  the  hour  let  him 
write  a  question  upon  the  blackboard,  to  be  an- 
swered by  each  one  in  writing  within  the  first 
ten  or  fifteen  minutes.  The  attempt  to  write 
out  an  explanation  clearly,  without  hint  or  clew 
from  the  instructor,  will  reveal  to  the  best  stu- 
dent the  deficiencies  and  gaps  in  his  knowledge. 
Each  one  will  then  have  the  keenest  interest  to 
know  what  is  considered  a  satisfactory  answer 
to  the  question.  At  the  next  exercise  of  the 
class,  the  instructor  can  read  some  good  and 
some  bad  answers,  point  out  the  general  mis- 
takes, and  advise  his  pupils  for  the  future.  No 
exercise  can  be  better  than  this  in  cultivating 
the  habit  of  careful  expression,  and  in  learning 
how  to  make  a  clear  and  pointed  exposition  of 


THE   STUDY  OF  POLITICAL  ECONOMY.     I25 

a  subject  in  a  short  space.  This  practice  tends 
to  secure  the  accuracy  which  in  the  oral  discus- 
sions is  made  second  to  fluency  and  readiness. 
The  teacher,  I  believe,  will  be  forced  to  some 
such  method  as  this,  if  he  hopes  to  get  a  real 
idea  of  the  prevailing  difficulties  in  the  minds 
of  his  class.  They  are  in  the  nature  of  anony- 
mous communications,  in  which,  as  no  one  else 
can  know  what  he  is  writing,  the  student  may 
without  timidity  show  exactly  what  he  can  do. 
In  fact,  the  written  answers  afford  admirable 
means  of  judging  how  far  the  class  have  taken 
serious  hold  of  the  subject,  and  they  enable  the 
instructor  to  modify  the  nature  of  his  questions 
to  members,  or  to  change  the  character  of  the 
exercise  to  suit  a  set  of  slower  men.  But  one 
of  the  best  uses  of  these  written  answers,  in 
my  experience,  has  been  to  break  down  the  ti- 
midity which  prevented  questions  in  the  class- 
room. The  criticism  of  an  answer  before  the 
class  is  certain  to  bring  out  as  defender,  either 
the  writer,  or  one  who  gave  a  similar  reply ; 
and  the  whole  number  of  men  will  be  very  rest- 
ive under  criticism  of  a  piece  of  work  at  wliich 
each  has  tried  his  hand.  As  soon  as  question- 


I26     THE  STUDY  OF  POLITICAL  ECONOMY. 

ing  becomes  natural  and  easy,  the  number  ol 
written  exercises  can  be  diminished,  and  the 
whole  hour  given  to  discussions  with  the  class. 
5.  Since  the  chief  work  of  the  class-room  is 
not  to  enable  students  to  discover  principles, 
but  rather  to  understand  and  apply  them,  prob- 
ably the  most  useful  method  of  interesting  a 
class  is  to  present  to  them,  in  extracts  from  the 
newspapers  of  the  day,  bits  of  fallacious  dis- 
cussions *  which  may  come  under  the  head  of 
the  subject  in  hand,  and  then  to  ask  for  criti- 
cism and  discussion.  This  will  also  suggest 
doubts  and  difficulties  which  had  not  been  anti- 
cipated in  the  minds  of  some,  and  will  aid  in 
stimulating  questions.  The  appositeness  of  a 
timely  topic  before  the  public  is  peculiarly  ser- 
viceable for  such  purposes.  In  fact,  the  practi- 
cal matters  of  our  own  country  will  never  fail 
to  excite  a  lively  interest  in  almost  any  class ; 
and  through  this  interest  the  teacher  can  find  a 

*  Professor  W.  G.  Sumner  has  published  a  volume  of  "  Prob- 
lems in  Political  Economy"  (1884),  which  adopts  the  plan  above 
described  for  advanced  classes.  The  system  is  also  most  excellently 
carried  out  in  a  forthcoming  elementary  treatise  on  Political 
Economy  by  Simon  Newcomb,  to  be  published  during  the  coming 
summer. 


THE  STUDY  OF  POLITICAL  ECONOMY. 


127 


way  of  leading  men  to  study  principles  more 
carefully.  A  National  or  State  campaign  is 
very  likely  to  furnish  an  instructor  with  a  plen- 
tiful supply  of  extracts  from  speeches  of  an 
economic  character  for  discussion  by  his  class. 
The  learner  in  political  economy  is  not  hin- 
dered by  the  same  disagreeable  obstacles,  as 
hamper  the  medical  student,  in  finding  subjects 
on  which  to  put  his  learning  into  practice. 

6.  Many  minds  are  unable  to  keep  hold  on 
an  abstraction,  or  general  principle ;  or  they 
may  have  been  untrained  in  making  nice  dis- 
tinctions between  ideas  or  definitions.  And 
these  students  form  a  very  large  proportion  of 
the  ordinary  classes.  To  such  persons  a  skillful 
teacher  ought  to  offer  some  help.  Diagrams 
have  seemed  to  me  most  useful  for  this  purpose, 
and  a  reason  can  be  given  for  their  use.  Just  as 
in  beginning  a  strange  language,  when  words 
of  widely  different  meaning  have  a  similarity 
to  the  untutored  eye,  the  distinctions  do  not 
make  much  impression.  So  it  is  in  regard  to 
principles  and  definitions  in  political  economy. 
Therefore,  visible  expression  of  the  abstract 
relationships,  by  diagrams,  or  by  any  figures 


I28     THE   STUDY  OF  POLITICAL  ECONOMY. 

which  represent  the  abstract  in  a  concrete 
form,  will  be  of  very  considerable  service  to 
the  average  student.  This  matter  seems  to  me 
to  be  of  such  practical  importance  in  teaching 
that  it  will  be  worth  while  to  illustrate  my 
meaning  by  a  few  examples. 

(a.)  Since  material  wealth  comprises  all 
things  that  have  value  ;  since  capital  is  only 
that  wealth  employed  in  reproduction,  and  not 
used  by  the  owner  himself ;  and  since  money  is 
that  part  of  wealth  in  circu- 
lation aiding  in  the  transfer 
of  goods  —  the  relations  be- 
tween the  three  may  be  ex- 
pressed to  the  commonest 
apprehension  by  some  such 
device  as  the  following,  in 
which  the  area  of  circle  A  represents  the  total 
amount  of  wealth ;  B,  the  capital  saved  out  of 
the  total  wealth  ;  and  C,  the  money  by  which 
goods  are  transferred — only  that  part  of  circle 
C  being  capital  which,  inside  of  circle  B,  is  be- 
ing used  as  a  means  to  production. 

Again,  (b)  it  is  seen   that    different   classes 
of  laborers,  arranged  according  to  their  skill, 


THE  STUDY  OF  POLITICAL  ECONOMY.     I29 

form,  as  it  were,  social  strata,  of  which  the 
largest  and  the  poorest  paid  is  composed  of 
the  unskilled  laborers  at  the  bottom.  This 
may  be  shown  to  the  eye  at  once  by  the  sec- 
tion of  a  triangle,  in  which  A  represents  the 
largest  and  least  paid  class ;  B,  the  better-edu- 
cated, and  relatively  more  skillful  laborers ; 
ending  finally  in  the  few  at  the  top,  of  the  most 


competent  executive  managers.  Now,  if  A 
were  to  become  as  fully  skilled  as  B,  and  com- 
petition should  become  free  between  all  mem- 
bers of  A  and  B  ;  and  if  this  were  to  go  on  in 
the  same  way  to  include  C — the  effects  of  this 
breaking  down  of  the  barriers  which  hinder 
competition  might  be  illustrated  by  the  fol- 
lowing changes  in  the  above  triangle :  the  areas 
of  A,  B,  and  C  may  be  thrown  together  into 


I3o     THE   STUDY  OF  POLITICAL  ECONOMY. 

one  area  within  the  whole  of  which  movement 
and  choice  are  perfectly  free  to  the  laborer,  and 
wherein  wages  are  in  proportion  to  sacrifice. 
This  can  be  done  by  striking  out  the  lines  of 
division  between  A,  B,  and  C,  and  represent- 
ing the  change  by  the  area  included  between 
the  base  and  the  dotted  lines. 


Examples  might  be  multiplied  in  illustra- 
tion of  my  method,  but  these  must  suffice.  By 
such  means  there  can  be  planted  inside  even 
the  dull  mind  an  outline  of  an  idea  which  can 
then  be  modeled  and  shaded  to  the  condition 
of  a  natural  truth.  The  teacher  will  find,  by 
experience,  that  an  idea  thus  given  is  very  sel- 
dom forgotten.  The  pupil  has  thus  once 
turned  the  abstraction  into  a  concrete  form, 
and,  after  he  has  once  grasped  it,  he  can  now 


THE   STUDY  OF  POLITICAL  ECONOMY.     I3I 

use  it  for  himself.  It  does  not  at  all  imply  that 
he  will  get  hard  and  definite  conceptions  of 
human  affairs  by  this  process ;  for  he  is 
shown  that  the  principle  appears  in  other 
forms,  and  he  is  constantly  seeing  that  it  is  so. 
Having  found  out  how  a  principle  explains 
one  set  of  facts,  he  can  be  led  to  see  its  appli- 
cation to  other  conditions. 

7.  In  close  connection  with  this  method, 
but  having  an  entirely  different  end  in  view, 
is  the  use  of  charts  and  graphic  representa- 
tions of  statistics.  The  method  just  described 
above  aimed  to  help  in  finding  concrete  ex- 
pressions for  the  general  principles;  but 
graphic  methods  usually  serve  best  to  assist  in 
that  part  of  the  economic  process  heretofore 
referred  to  as  verification.  There  is  an  abun- 
dance of  economic  facts  in  regard  to  which  the 
connection  between  cause  and  effect  is  either 
unknown  or  grossly  misunderstood.  In  truth, 
the  subjects  to  which  political  economy  applies 
are  constantly  changing,  nay,  are  even  multi- 
plying. These  data,  after  having  been  collect- 
ed with  great  care  (which  is  the  duty  of  the 
statistician),  are  the  materials  for  the  process 


I32 


THE   STUDY  OF  POLITICAL  ECONOMY. 


of  verification.  By  this  "systematized  method 
of  observation,"  says  Cairnes,*  "  we  can  most 
effectually  check  and  verify  the  accuracy  of 
our  reasoning  from  the  fundamental  assump- 
tions of  the  science ;  while  the  same  expedient 
offers,  also,  by  much  the  most  efficacious  means 
of  bringing  into  view  the  action  of  those  minor 
or  disturbing  agencies  which  modify,  sometimes 
so  extensively,  the  actual  course  of  events.  The 
mode  in  which  these  latter  influences  affect  the 
phenomena  of  wealth  is,  in  general,  unobvious, 
and  often  intricate,  so  that  their  existence  does 
not  readily  discover  itself  to  a  reasoner  engaged 
in  the  development  of  the  more  capital  eco- 
nomic doctrines."  In  this  part  of  the  process 
graphic  representations  of  statistics  are  invalu- 
able. 

Every  one  knows  the  common  dislike  of 
dreary  statistics ;  to  many  persons  columns  of 
statistics  are  repellent  or  meaningless.  Collec- 
tions of  facts  regarding  banking,  finance,  tax- 
ation, and  wages  become  a  tangle  in  which 
one's  direction  is  constantly  lost.  But  arranged 
graphically  the  whole  direction  of  a  movement 

*  "  Logical  Method,"  p.  97. 


THE   STUDY  OF  POLITICAL  ECONOMY.     ^ 

is  seen  at  once,  and  the  mind  takes  in  new  and 
unexpected  changes,  which  force  an  investiga- 
tion into  their  cause.  Moreover,  there  comes 
a  certain  breadth  of  treatment,  when,  in  look- 
ing at  the  facts  graphically  expressed,  one  is 
able  to  see  the  whole  field  at  once.  There  is 
no  waste  of  thought  on  temporary  and  accident- 
al movements,  for  the  action  is  seen  from  be- 
ginning to  end  at  one  glance.  There  are  many 
charts  which  would  illustrate  this  meaning 
very  distinctly ;  but  perhaps  none  are  simpler 
than  the  one  here  appended,  showing  the  steady 
and  continuous  fall  in  the  value  of  silver  rela- 
tively to  gold  since  the  discovery  of  the  New 
World.  No  one  has  ever  claimed  that  there 
has  been  any  "unfriendliness"  displayed  to- 
ward silver  in  the  legislation  of  the  chief  coun- 
tries of  the  world  before  the  present  century, 
at  the  farthest,  and  yet  the  white  metal  has 
been  steadily  on  the  decline  ever  since  the 
Spanish  galleons,  in  the  fifteenth  century,  be- 
gan to  pour  the  precious  metals  of  America 
into  the  coffers  of  Spain. 

Another  illustration  of  my  meaning  can  be 
found    in   the    study  of    the   facts   relating    to 

12 


3 

i 

•PNO     5 

i 

0    . 

JW3- 

-oii'.l 

I 

M    |t 

mi,o: 

JOA 

!s'     - 

jo  SMTJ 

-„ 

V. 

b 

f«i 

6V 

SI  | 

-ti  i 

t«'j 

.1 

KJ.II 

V 

ft 

ilf 

U1I 

1 

n't 

1 

I'll 

^ 

fti'ijt 

& 

991V. 

1 

-  v'   ' 

»'si! 

;: 

x! 

K 

5t| 

;;; 

1? 

v'si! 

,",  : 

^ 

I 

5! 

ii 

3 

t 

8 

5*1 

§i 

V 
Q 

^ 

t 

x 
'=i 

§1 

II 

1 

£ 

V 

s 

o 

2~ 

si! 

1 

£ 

* 

; 

1 

ill 

§     * 

0 

|j 

si! 

3 

s       2 
<a       "8 

$ 

1 

•^ 
* 

5| 

is 

i 

•S      ~ 

s      - 

$ 

3 

2 

Bl| 

t 

> 

§,  5 

j 

Ii 

3 

H 

ii 

.j 

«    I 

> 

% 

i! 

1 

el 

5 

z    s 

*<*!            o 

1 

•J 

^ 

I 

i? 

! 

* 

% 

i 

*r 

S 

03 

si 

C 

\ 
\ 

O 

c 

t 

1 

1 

11 

4 

M 

t- 

a: 

r' 

i 

0 

0 

§§ 

& 

f] 

£ 

C 

1 

5 

§§i 

.s 

2 

^ 

5 

i 

1 

Sij 

t 

1 

^ 
| 

ill 

t 

§ 

»-* 

3 

1 

ii 

t 
? 

il 

1 

| 

ill 

8 

6 

g 

5 

ii! 

5 

I 

1 

ii 

5 

o 

1 

I 

ii 

5 

•ft 

1 

ii 

9 

A 

5 

=  §i 

I 

s| 

0 

»n 

»du, 

8:>ano 

IX 

•sso 

™«! 

LRSJO 

0. 

« 

i 

\ 

• 

S 

1 

i 

r   . 

;   : 

:\\\ 

\"\; 

t 

1! 

S    . 

|, 

[ 

|, 

if 

f1 

!fi 

3  i 

j  , 

•     r-  i 

,,,  ;i 

THE   STUDY  OF  POLITICAL  ECONOMY.     T^ 

American  shipping-.  We  have  heard — until 
the  story  is  now  worn  threadbare — of  the  de- 
cline of  our  tonnage  engaged  in  the  foreign 
carrying  trade ;  we  have  listened  to  explana- 
tions which  attribute  this  decline  wholly  to 
our  Civil  War,  or  to  the  introduction  of  steam 
and  iron  (or  steel)  ships.  But  by  collating  the 
statistics  for  sailing-vessels  alone,  if  we  sepa- 
rate the  question  entirely  from  steam  and  iron, 
and  compare  our  situation  in  regard  to  sailing- 
vessels  with  that  before  the  use  of  steam — 
the  period  of  our  great  shipping  prosperity — 
the  comparison  gives  some  curious  results. 
These  are  shown  to  the  eye  at  a  glance;  and 
it  would  have  been  difficult  to  find  them  had 
not  this  graphic  system  been  applied.  The 
striking  facts  imperatively  call  for  explanation. 
We  see  at  once  that,  practically,  to  the  end  of 
the  war  our  sailing  tonnage  changed  only  with 
the  total;  and  that  after  1869  it  was  the  for- 
eign tonnage  which  then  rose  and  kept  a  close 
attendance  on  the  total,  while  the  American 
figures  showed  scarcely  any  relative  change. 
The  two  lines,  representing  foreign  and  Ameri- 
can vessels,  after  a  short  struggle  with  each 


I36     THE  STUDY  OF  POLITICAL  ECONOMY. 


Chart  showing  the  Tonnage  of  Sailing  Vessels  entered  at 
Seaports  of  the  United  States  each  year,  from  1844  to 
1883,  inclusive. 


-H 

I  i 


o 

» 
rn 

844  1 


V 


1849 


854 


859 


TPIE   STUDY  OF  POLITICAL  ECONOMY.     I37 

other  exactly  changed  their  relative  positions 
to  the  line  representing  the  total  tonnage.  The 
graphic  method  lays  bare  the  naked  facts  for 
the  scalpel  of  the  investigator.  The  student  is 
then  in  a  position  to  apply  principles  and  dis- 
cover explanations.  No  table  of  figures,  I  am 
convinced,  would  disclose  vital  relations  in  the 
statistics  in  the  searching  way  by  which  it  is 
done  with  the  aid  of  a  few  lines  on  a  chart. 

In  short,  the  more  extended  collection  of 
economic  data  is  now  rendered  possible  through 
the  better  methods  employed  in  census  and 
statistical  bureaus,  and  the  resort  to  the  work 
of  verification  of  economic  principles  in  the 
examination  of  these  data  is  one  of  the  best 
means  by  which  political  economy  can  be  re- 
deemed from  the  baseless  and  common  charge 
of  being  made  up  of  formulas  which  have -no 
practical  use.  Into  this  work  one  can  carry  no 
instrument  so  effective  and  helpful  as  graphic 
representations.  In  fact,  the  investigator,  after 
having  collected  his  tables  and  columns  of  fig- 
ures, will  find  his  gain  in  first  putting  them 
in  some  graphic  form,  before  he  can  intelli- 
gently see  exactly  with  what  he  has  to  grapple  ; 


I38     THE   STUDY  OF  POLITICAL  ECONOMY. 

then  he  can  turn  his  energies  directly  upon  the 
problems  which  are  disclosed  by  the  chart  to 
every  other  eye  as  well  as  his  own. 

There  are,  however,  other  important  gains 
to  be  derived  from  the  use  of  charts  by  the 
teacher.  Above  all,  they  are  interesting.  They 
will  attract  the  idler  by  something  new  which 
he  can  easily  understand,  although  he  can  not 
explain  the  causes ;  they  stimulate  the  quick  by 
putting  them  at  once  in  possession  of  the  facts 
to  be  explained.  When  lecturing  upon  practi- 
cal questions,  one  great  difficulty  presents  itself 
to  the  teacher  in  trying  to  find  the  means  of 
laying  before  his  class  the  actual  condition  of 
the  subject  which  is  to  be  investigated.  If  it 
were  proposed  to  place  the  statistics  on  the 
blackboard  before  him,  the  time  of  the  lect- 
urer would  all  be  lost  while  the  student  was 
copying  figures.  The  references  to  the  books 
can  be  given  where  these  figures  dealt  with 
by  the  lecturer  are  collected,  but  by  a  chart 
long  columns  of  statistics  are  easily  imported 
into  the  class-room,  become  the  basis  of  discus- 
sion, and  are  photographed  on  the  listener's 
mind  once  for  all  in  an  attractive  and  interest- 


THE   STUDY  OF  POLITICAL  ECONOMY.     I39 

ing  way.  The  slow  and  painful  work  of  months 
is  in  this  way  presented  to  a  class  in  a  few  min- 
utes, and  the  practical  lessons  caught  at  a 
glance.  For  this  purpose,  charts  are  the  labor- 
saving  machines  of  statistics. 

A  word  or  two  as  to  the  details  of  preparing 
charts  may  not  be  impertinent.  They  can  be 
made  on  common  glazed  white  cotton  cloth 
(called  sarcenet  cambric),  which  receives  ink 
or  water-colors;  but  the  labor  of  ruling  the 
cloth  in  squares  before  the  construction  of  the 
chart  is  very  considerable.  Use  can  be  made, 
however,  of  heavy  manila  paper,  made  large 
enough  by  sticking  two  large  sheets  together. 
Some  printers  can  now  rule  this  paper  in 
squares  to  suit  the  convenience  of  the  worker ; 
but  these  guiding-lines  ought  to  be  faint,  and 
not  so  heavy  as  to  overpower  the  lines  of  the 
chart.  The  instructor  can  also  have  a  black- 
board ruled  with  faint  white  lines,  after  the 
manner  of  co-ordinate  paper,  in  his  room,  on 
which  he  can  in  half  an  hour  put  a  simple  chart, 
ready  for  the  coming  lecture.  Different  colored 
crayons  serve  the  purpose  admirably.  Students 
can  then  use  co-ordinate  paper  in  their  notes, 


I4o     THE   STUDY  OF  POLITICAL   ECONOMY. 

and  draw  off  an  accurate  copy  of  the  chart  in  a 
few  moments,  before  or  after  the  lecture.  This 
is  a  necessary  course,  unless  some  more  feasible 
method  than  now  exists  should  be  found  by  the 
instructor  for  multiplying  copies  from  his  single 
chart  in  such  numbers  as  to  supply  all  members 
of  his  class. 

So  far  I  have  been  speaking  of  charts  for 
the  class-room.  Perhaps,  in  their  own  good 
time,  such  economic  charts  can  be  bought  of 
educational  agencies.  But  ordinary  co-ordinate 
paper,  on  a  small  scale,  is  the  best  form  in 
which  first  to  construct  the  chart.  It  can  be 
purchased  in  sheets  at  a  small  price,  and  is 
invaluable  for  both  student  and  instructor.  In 
fact,  no  lesson  is  more  stimulating  to  a  class 
than  to  give  them  the  data  of  a  subject  and  ask 
them  to  put  it  into  graphic  form  with  the  use 
of  such  paper.  For  the  first  time  they  begin 
to  realize  that  statistics  are  not  dry ;  indeed, 
any  one  who  has  turned  over  the  pages  of 
Walker's  "Statistical  Atlas"  will  find  out  for 
himself  how  the  columns  of  census  tables*  can 

*  Another  successful  attempt,  on  an  elaborate  scale,  has  been 
made  with  the  materials  of  the  census  of  1880  by  Messrs.  Gannett 


THE   STUDY  OF  POLITICAL  ECONOMY.     I4I 

talk  to  him  in  forms  and  colors  not  only  with- 
out weariness,  but  with  a  sense  of  surprise  at 
the  interest  they  excite. 

8.  When  the  instructor  comes  to  examina- 
tions he  will  find  some  difficulties  in  combining 
an  ideal  plan  with  actual  conditions.  In  mak- 
ing out  a  paper  he  ought,  of  course,  to  keep 
in  view  that  the  questions  should  be  selected 
so  as  to  test  not  the  memory,  but  the  power  of 
the  pupil  to  apply  principles.  For  this  reason 
the  ideal  paper  should  contain  nothing  which 
the  student  has  seen  in  that  form  before.  The 
facts  he  is  called  upon  to  explain  ought  to  be 
fresh  ones,  and  the  fallacies  he  is  to  examine 
should  be  such  as  he  had  not  previously  con- 
sidered. This,  however,  is  not  wholly  neces- 
sary. The  explanation  of  parts  of  the  subject 
is  certain  to  be  difficult  enough  to  warrant 
questions  upon  them  even  if  they  have  been 
referred  to  in  the  class-room  many  times  be- 
fore. For  practical  purposes,  however,  it  seems 
best  to  remember  that  a  class  is  composed  of 
all  kinds  of  persons,  and,  while  the  majority  of 

and  Hewes  in  Scribner's  "  Statistical  Atlas  of  the  United  States  " 
(1885). 


I42     THE  STUDY  OF  POLITICAL  ECONOMY. 

the  questions  should  be  of  the  character  which 
I  have  described,  yet  at  least  a  few  easier  and 
more  encouraging  questions  should  be  set.  In 
the  examination-room  the  student,  moreover, 
should  be  instructed  to  study  each  question 
with  care,  and  avoid  haste  in  answering,  before 
he  is  sure  that  he  has  really  caught  the  pivotal 
point  of  the  question.  Fairly  good  students 
often  write  about  the  question  but  do  not  an- 
swer it.  It  should  be  definitely  understood  that 
no  credit  is  to  be  given  for  irrelevant  answers. 
Then,  also,  the  examination  can  be  used  as  a 
teaching  process ;  since,  by  inserting  an  impor- 
tant subject,  the  attention  given  to  it  at  these 
times  will  be  such  as  to  keep  it  from  speedy 
oblivion.  Moreover,  it  will  be  well,  as  soon 
after  the  examination  as  possible,  to  read  a  good 
and  a  poor  answer  to  each  question  before  the 
class.  They  will  know  better  what  is  expected 
of  them  in  the  future — like  troops  after  their 
first  fight.  After  such  an  examination  the  in- 
structor will  find  his  class  much  more  discip- 
lined and  more  ready  to  exert  themselves  in 
the  intellectual  wrestling.  The  vigorous  prep- 
aration for  the  examination  has  really  given 


THE   STUDY  OF  POLITICAL  ECONOMY.     I43 

them  a  better  grasp  of  the  subject,  and  the 
teacher  can  easily  bring  on  a  warm  discussion 
now,  because  they  really  know  something  and 
feel  that  they  know  it.  In  all  this  it  is  under- 
stood, of  course,  that  I  have  had  in  mind  writ- 
ten examinations. 

9.  When  first  approaching  the  study,  it  has 
been  found  to  be  of  service  to  some  minds  to 
suggest  that  on  the  first  reading  of  the  text- 
book they  note  in  the  margins  in  a  few  penciled 
words  the  gist  of  each  paragraph  as  it  is  read ; 
then,  at  the  close  of  the  chapter,  that  the  reader 
review  it  by  means  of  his  marginal  notes,  and, 
finally,  make  a  general  but  brief  synopsis  of  the 
chapter.     This  will  both  save  time  and  teach 
that  essential  thing — how  to  study  rapidly  but 
thoroughly.      It  will   destroy   aimless   reading, 
which   is  so   common   in   these  dayS  of   many 
books. 

10.  Inasmuch  as  a  vigorous  contact  of  mind 
with  mind  on  a  subject  which  students  are  ap- 
proaching for  the  first  time  is  necessary  to  pro- 
duce something   more   than  a  cartilaginous  or 
veal-like  quality  in  their  knowledge,  it  is  desira- 
ble to  stimulate  discussion  among  members  of 


I44     THE   STUDY  OF  POLITICAL  ECONOMY. 

the  class  outside  of  the  class-room.  To  accom- 
plish this  purpose,  I  know  of  no .  better  plan 
than  to  recommend  students  to  form  temporary 
clubs  of  three  or  four  persons  to  meet  two  or 
three  times  a  week  for  an  hour's  discussion  of 
the  questions  and  topics  which  have  been  sug- 
gested by  the  text-book,  by  newspapers,  or  by 
facts  of  e very-day  observation.  Such  discus- 
sions, if  the  evil  of  irrelevancy  can  be  frowned 
upon,  will  toughen  the  intellectual  fiber,  and 
give  the  means  also  of  getting  more  from  the 
instructor  through  questions  upon  difficulties 
and  disagreements  which  have  arisen  in  the 
clubs.*  Congenial  persons  might  group  them- 
selves together  in  this  way  with  profit  to  their 
economic  progress,  and  gain  something  also  in 
social  pleasure  of  a  healthy  kind. 

n.  In  advanced  courses,  much  of  what  has 
been  said  in  regard  to  details  in  the  conduct  of 

*  When  about  twenty,  John  Stuart  Mill  met  twice  a  week  in 
Threadneedle  Street,  from  8.30  to  10  A.  M.,  with  a  political  econ- 
omy club,  composed  of  Grote,  Roebuck,  Ellis,  Graham,  and  Pres- 
cott,  in  which  they  discussed  James  Mill's  and  Ricardo's  books. 
It  was  understood  that  a  topic  should  not  be  passed  by  until  each 
member  had  had  full  chance  for  a  discussion  of  his  difficulties  and 
objections.  In  these  meetings  Mill  elaborated  whatever  he  has 
added  to  the  knowledge  of  political  economy. 


THE   STUDY  OF  POLITICAL  ECONOMY.     I45 

the  class  will  be  less  important,  because  the 
teaching"  is  necessarily  different  in  kind.  Such 
courses  naturally  fall  either  (i)  into  those  which 
continue  to  study  principles,  as  in.  the  systems 
of  various  writers  or  schools  of  political  econ- 
omy in  the  past  and  present,  or  (2)  into  those 
which  treat  historical  or  practical  questions. 
In  the  former,  the  lecture  system  is  unsatisfac- 
tory for  reasons  already  given;  for  the  mem- 
bers of  the  class  should  themselves  be  constant- 
ly wrestling  with  the  fuller  discussion  of  sub- 
jects in  which  they  can  hitherto  have  had  only 
a  general  knowledge.  Experience  seems  to 
show  that  a  topic,  furnished  with  references  to 
writers,  affords  the  best  method  of  procedure. 
This,  of  course,  implies  a  good  working  library 
and  a  list  of  reserved  books. 

In  the  practical  courses  a  large  part  of  the 
training  consists  in  teaching  the  student  how  to 
use  books,  how  to  familiarize  himself  with  the 
principal  storehouses  of  statistics,  such  as  the 
English  "  Parliamentary  Documents,"  or  our 
own  Government  publications ;  how  to  collect 
his  materials  in  a  useful  form;  how  to  apply 
graphic  representations  wherever  possible ;  in 
13 


I46     THE   STUDY  OF  POLITICAL  ECONOMY. 

brief,  to  learn  how  to  carry  on  an  investigation 
in  the  economic  field.  Of  course,  the  familiar- 
ity with  the  facts  of  several  of  the  leading-  ques- 
tions of  the  day  will  form  no  small  part  of  the 
advantage  of  such  work.  But  the  greatest 
good  comes,  of  course,  from  putting  the  student 
on  his  own  resources  at  once  and  forcing  him 
to  find  his  own  materials,  look  up  his  own 
books  and  authorities,  and  come  to  a  conclusion 
on  the  subject  assigned  to  him  independently  of 
all  aid  or  suggestion.  The  instructor  can  then 
at  the  conferences  take  up  a  paper  for  criticism 
and  discussion,  or.  first  assign  it  to  another  mem- 
ber for  that  purpose.  This  is  a  feasible  plan ; 
but,  if  carried  on  throughout  a  whole  course,  it 
requires  of  the  student  in  a  regular  college 
course  so  much  time  that  his  other  work  must 
suffer,  and,  in  addition,  but  few  subjects  can  be 
taken  up  in  this  thorough  and  leisurely  way. 
This  plan  can  be  properly  carried  out  only 
when  there  are  a  few  persons  able  to  devote 
their  whole  time  to  some  economic  investiga- 
tions. In  practice  it  has  been  found  best  to  use 
the  lecture  system  partially.  One  subject  can 
be  taken  up  by  the  instructor  at  regular  exer- 


THE   STUDY  OF  POLITICAL  ECONOMY.     I4y 

cises,  for  which  he  furnishes  beforehand  the  ref- 
erences, and  partly  lectures  and  partly  discuss- 
es the  subject  with  his  class,  thus  guiding  them 
steadily  over  the  field  and  directing  the  disposi- 
tion of  the  time  to  be  devoted  to  each  subject. 
In  this  way  many  more  subjects  can  be  reached 
during  the  year.  But  the  advantages  of  the  in- 
vestigating method  can  be  partly  retained  by 
requiring  a  monograph  from  each  member  of 
the  class  on  a  practical  subject  of  his  own  selec- 
tion from  a  list  prepared  by  the  instructor,  and 
this  thesis  can  count  for  attendance  on  part  of 
the  lecture-work.  In  this  thesis  the  student  is 
pushed  to  do  his  best  to  give  a  really  serious 
study  to  some  particular  topic,  and  he  is  ex- 
pected to  do  it  independently  of  any  aid  be- 
yond general  oversight  and  direction ;  and  he 
is  warned  that  the  paper  will  be  of  greater 
value,  provided  it  contains  the  bibliography  of 
the  subject  and  constant  reference  by  page  and 
volume  to  his  authorities. 

12.  The  preparation  of  bibliographies  is  part 
of  a  teacher's  duty.  Moreover,  he  who  has  ac- 
cess to  a  rich  and  well-appointed  library  can  do 
a  service  to  the  rest  of  his  guild  by  leaving  be- 


I48     THE  STUDY  OF  POLITICAL  ECONOMY. 

hind  him  notes  of  his  bookish  experiences.  He 
can  in  a  few  words  say  whether  a  book  is  good 
or  bad  for  a  particular  use,  or  indicate  what 
part  of  it  contains  a  valuable  discussion  or  use- 
ful facts  in  a  subject  within  his  study.  For 
this  purpose  it  has  been  a  great  convenience  to 
have  little  blank-books  of  ordinary  stiff  manila 
paper,  six  inches  by  three,  with  each  sheet  per- 
forated like  postage-stamps  near  the  butt  of  the 
book,  so  that  it  can  be  torn  off  smoothly.  On 
each  page  a  book  can  be  entered  under  a  suit- 
able heading,  with  its  exact  title  and  author, 
and  room  still  be  left  for  a  very  generous 
amount  of  criticism  or  commendation,  or  for 
noting  the  contents  of  the  book.  The  cards  can 
be  laid  away  alphabetically  by  subjects  in  a 
drawer,  and  will  prove  of  invaluable  aid  at 
many  times.  Books  of  which  one  has  heard 
but  never  seen,  can  also  be  entered  with  a  star, 
to  be  erased  when  a  book  has  been  examined. 
This  systematic  habit  is  peculiarly  desirable 
when  one  is  hunting  for  the  facts  of  a  certain 
subject.  By  this  means  one  will  be  saved  the 
loss  of  time  caused  by  failure  to  remember 
where  a  statement  has  once  been  seen. 


THE   STUDY  OF  POLITICAL  ECONOMY.     I49 

13.  In  the  foregoing  remarks  on  methods 
of  teaching  political  economy,  I  have  kept  in 
mind  persons  of  the  age  and  maturity  possessed 
by  usual  college  students.  As  a  rule,  these  are 
the  only  persons  who  are  given  instruction  in 
this  subject.  Still,  knowing  as  we  do  the  need 
of  simple  elementary  instruction  in  political 
economy  in  the  secondary  and  high  schools, 
so  that  younger  pupils  of  less  maturity  than 
the  college  student  ought  to  have  good  effec- 
tive teaching,  something  ought  to  be  said  as 
to  the  methods  which  may  be  serviceable  for 
such  classes. 

A  difficulty  with  which  we  are  met  at  the 
outset  is  the  lack  of  training  among  high-school 
teachers  for  original  and  suggestive  object- 
teaching  in  economics.  Any  scheme,  based  on 
such  a  system,  implies  the  possession  of  a  very 
considerable  economic  training  by  the  teachers. 
What  is  meant  may  be  seen  by  the  following 
excellent  suggestions  for  certain  parts  of  the 
study  made  by  Dr.  Ely :  * 

"  The  writer  has  indeed  found  it  possible  to 

*  In  "  Methods  of  Teaching  and  Studying  History,"  edited 
by  G.  Stanley  Hall,  p.  63. 


150     THE  STUDY  OF  POLITICAL  ECONOMY. 

entertain  a  school-room  full  of  boys,  varying  in 
age  from  five  to  sixteen,  with  a  discourse  on 
two  definitions  of  capital — one  taken  from  a 
celebrated  writer,  and  the  other  from  an  ob- 
scure pamphlet  on  socialism  by  a  radical  re- 
former. As  the  school  was  in  the  country, 
illustrations  were  taken  from  farm-life,  such  as 
corn-planting  and  harvesting,  and  from  the  out- 
door sports  of  the  boys,  such  as  trapping  for 
rabbits." 

In  teaching  the  functions  of  money,  the  fol-* 
lowing  approach  to  the  subject,  suggested  by 
the  same  writer  as  a  means  of  awakening  an 
interest,  is  a  good  one :  "  Take  into  the  class- 
room the  different  kinds  of  money  in  use  in  the 
United  States,  both  paper  and  coin,  and  ask 
questions  about  them,  and  talk  about  them. 
Show  the  class  a  greenback  and  a  national  bank' 
note,  and  ask  them  to  tell  you  the  difference. 
After  they  have  all  failed,  as  they  probably 
will,  ask  some  one  to  read  what  is  engraved  on 
the  notes,  after  which  the  difference  may  be 
further  elucidated." 

If  the  teacher   is   sufficiently  master  of  the 
subject  to  proceed  by  such  ways  to  acquire  a 


THE  STUDY  OF  POLITICAL  ECONOMY.    I5I 

hold  on  the  young  pupil  he  will  probably  not — 
as  things  now  go — be  found  in  a  high  school. 
It  is  to  be  hoped  that  he  may  in  the  future  ; 
but,  until  that  is  the  fact,  some  more  practicable 
method  of  teaching  must  be  adopted.  Much 
must,  therefore,  depend  on  the  text-book.  But 
no  fully  satisfactory  one  is  available  for  such 
purposes.  Of  existing  books  the  following  may 
be  suggested :  W.  S.  Jevons's  "  Primer  of  Politi- 
cal Economy "  (1878).  This  little  treatise  is 
marred  by  the  treatment  of  utility  and  value; 
but  yet  it  is  a  really  good  sketch  of  the  subject 
in  134  pages.  The  teacher  can  further  illus- 
trate the  principles  to  his  class  by  familiar  facts, 
as  already  explained.  The  instructor  should  set 
forth  distinctly  in  his  mind,  as  a  general  object 
to  be  kept  before  him,  the  attempt  to  leave  in 
the  understanding  of  his  pupils  some  simple 
principle  in  each  case.  If  he  is  talking  of  capi- 
tal, the  several  illustrations  should  all  lead  the 
pupil  back  to  the  essential  truth  which  is  finally 
to  be  stated  in  general  terms.  Then,  the  pupil, 
when  reviewing,  should  be  required  to  reverse 
the  process,  and  then  called  on  for  principles 
and  asked  to  illustrate  them.  The  aim  of  the 


I52     THE   STUDY  OF  POLITICAL  ECONOMY. 

teacher  should  be,  after  awakening  interest,  not 
simply  to  teach  some  few  facts  to  which  eco- 
nomic principles  apply,  but  to  try  to  drive 
home  a  few  fundamental  truths,  and  exercise  the 
pupil,  as  far  as  time  and  skill  allow,  in  tracing 
their  operation  in  facts.  For  economic  facts 
are  constantly  shifting,  while  principles  do  not. 
A  boy  taught  how  properly  to  view  one  set 
of  facts  about  paper  money  will  go  all  right  as 
long  as  the  conditions  remain  exactly  the  same, 
but  when  they  change  he  is  very  badly  off  for 
guidance.  In  elementary  teaching,  therefore, 
the  teacher  should  aim  at  giving  a  clear  com- 
prehension of  simple  principles,  and  at  offering 
materials  for  practice  in  applying  these  princi- 
ples. Much,  consequently,  which  has  been  said 
in  regard  to  more  mature  students  will  be 
equally  applicable  to  the  teaching  of  young 
boys. 

In  this  brief  and  inadequate  way  I  have  at- 
tempted to  suggest  from  my  own  experience 
what  may  enable  others  to  avoid  difficulties,  and 
possibly  to  aid  in  a  more  rational  method  of 
teaching  political  economy.  It  is  scarcely  more 


THE  STUDY  OF  POLITICAL  ECONOMY.     ^3 

probable  that  what  I  have  said  is  all  new  than 
that  others  should  agree  with  me  throughout  in 
what  I  have  advanced  ;  nor  is  it  unlikely  that 
other  teachers  may  have  many  other  suggestions 
to  make  in  addition  to  mine.  If  my  efforts  may 
call  them  out  and  aid  in  better  methods  of 
teaching,  I  shall  be  amply  repaid. 


TJHIVERSITY 


THE  END. 


) 


/ 


RETURN  TO  the  circulation  desk  of  any 
University  of  California  Library 
or  to  the 

NORTHERN  REGIONAL  LIBRARY  FACILITY 
Bldg.  400,  Richmond  Field  Station 
University  of  California 
Richmond,  CA  94804-4698 

ALL  BOOKS  MAY  BE  RECALLED  AFTER  7  DAYS 
2-month  loans  may  be  renewed  by  calling 

(415)642-6233 
1-year  loans  may  be  recharged  by  bringing  books 

to  NRLF 
Renewals  and  recharges  may  be  made  4  days 

prior  to  due  date 


DUE  AS  STAMPED  BELOW 


AUG  n  8  2002 


814 


f 


